Co-obligor

CO-OBLIGOR, contracts. One who is bound together with one or more others to fulfill an obligation. As to what will constitute a joint obligation, see 5 Bin. 199; Windham's Case, 5 Co. 7; 2 Ev. Poth. 63; Ham. Parties, 29, 20, 24; 1 Saund. 155; Saunders, Arguendo and note 2; 5 Co. 18 b, 19 a, Slingsly's Case. He may be jointly, or severally bound.
     2. When obligors are jointly and not severally bound to pay a joint debt, they must be sued jointly during their joint lives, and after the death of some of them, the survivors alone can be sued; each is bound to pay the whole debt, having recourse to the others for contribution. See 1 Saund. 291, n. 4; Hardress, 198; 2 Ev. Poth. 63, 64, 66. Yet an infant co-obligor need not be joined, for his infancy may be replied to a plea of non-joinder in abatement. 3 Esp. 76; 5 Esp. 47; also, see 5 Bac. Abr. 163-4; 2 Vern. 99; 2 Moss. Rep. 577; 1 Saund. 291 b, n. 2; 6 Serg. & R. 265, 266; 1 Caines' Cases in Err. 122.
     3. When co-obligors are severally bound, each may be sued separately; and in case of the death of any one of them, his executors or administrators may be sued.
     4. On payment of the obligation by any one of them, when it was for a joint debt, the payer is entitled to contribution from the other co- obligors.

References in periodicals archive ?
Debtor George Harris and a co-obligor defaulted on a mortgage with creditor Wells Fargo Bank before filing and dismissing four Chapter 13 petitions between them over a two-year period in an alleged bad-faith attempt to thwart the bank's foreclosure efforts.
In a recent decision, the United States Bankruptcy Court for the Northern District of Iowa (the "Bankruptcy Court"), in In re Bailey Ridge Partners, LLC, took the unusual step of staying two litigations against non-debtors, one to enforce claims against guarantors of a debtor's obligations and the other to enforce a claim against a non-debtor co-obligor. The Bankruptcy Court concluded that: (a) the debtor was likely to successfully reorganize and emerge from bankruptcy; (b) the guarantors and co-obligor were critical to the success of the reorganization based on the financial and other support they had provided and committed to provide to the debtor; and (c) the creditor suing the non-debtor guarantors was fully secured by the debtors assets.
Penney) of a private offering of USD350m aggregate principal amount of senior secured second priority notes, for which the company would be a co-obligor, subject to market and other conditions.
Net proceeds from the sale of the Notes, after deducting the underwriting discount and the co-obligor's estimated fees and expenses, are expected to be approximately USD 197.7m.
One example is a change in obligor or the addition or deletion of a co-obligor. Another example is a change in the nature of the debt instrument (i.e., an alteration that results in a change from recourse to nonrecourse or vice versa).
LEGAL COMMENTARY: Equitable contribution is the right to recover from a co-obligor who shares liability with the party seeking contribution.
"Even accepting this testimony, however, a jury could reasonably conclude that if the MBNA agents had investigated the matter further and determined that MBNA no longer had the application, they could have at least informed the credit reporting agencies that MBNA could not conclusively verify that Johnson was a co-obligor," Judge Wilkins wrote.
1.1001-3(c)(2)(i), even if an alteration occurs by operation of the terms of the debt instrument, it constitutes a modification if it results in the substitution of a new obligor, the addition or deletion of a co-obligor, or a change (in whole or in part) in the recourse nature of the instrument (e.g., from recourse to nonrecourse, or from nonrecourse to recourse).
Thus, if there is a co-obligor or guarantor on the debt with the Chapter 13 debtor, the creditor may not proceed against the guaranty or third-party obligation without securing release from the automatic stay in the bankruptcy court.
Penney Corporation Inc, its wholly owned subsidiary, has commenced an underwritten public offering of USD350m aggregate principal amount of senior unsecured notes, for which the company would be a co-obligor, subject to market and other conditions.
In Letter Ruling 200047046, the Service ruled that the release of a subsidiary as a co-obligor on a debt instrument had no Federal income tax consequences.
* Any alteration that results in the substitution of a new obligor, the addition or deletion of a co-obligor or a change in the recourse nature of the debt instrument.