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Related to Extinguishment: Early Extinguishment of Debt


The destruction or cancellation of a right, a power, a contract, or an estate.

Extinguishment is sometimes confused with merger, though there is a clear distinction between them. Merger is only a mode of extinguishment, and applies to estates only under particular circumstances, but extinguishment is a term of general application to rights, as well as estates. Extinguishment connotes the end of a thing, precluding the existence of future life therein; in mergers there is a carrying on of the substance of the thing, except that it is merged into and becomes a part of a separate thing with a new identity.

Two ways in which the extinguishment of a debt can occur are by release or by payment. Extinguishment of legacy takes place where what has been bequeathed by will ceases to exist. Extinguishment of rent may take place by the tenant purchasing the rented property from the landlord or by grant, release, or surrender of the rental agreement.


n. the cancellation or destruction of a right, quite often because the time for enforcement has passed. Example: waiting more than four years after the due date to make a demand for payment on a promissory note wipes out the person's right to collect the money owed to him/her. It can also occur by fulfilling the obligation so no further money or performance is due.

See: abolition, death, demise, deterrence, dissolution, end, extremity, termination

EXTINGUISHMENT, contracts. The destruction of a right or contract, the act by which a contract is made void.
     2. Art extinguishment may be by matter of fact and by matter of law. 1. It is by matter of fact either express, as when one receives satisfaction and full payment of a debt, and the creditor releases the debtor 11 John. 513'; or implied, as when a person hath a yearly rent out of, lands and becomes owner either by descent or purchase, of the estate subject to the payment of the rent, the latter is extinguished 3 Stew. 60; but the person must have as high an estate in the land as in the rent, or the rent will not be extinct. Co. Litt. 147. See Merger.
     3. There are numerous cases where the claim is extinguished b operation of law; for example, where two persons are jointly, but not severally liable, for a simple contract debt, a judgment obtained against one is at common law an extinguishment of the claim on the other debtor. Pet. C. C. 301; see 2 John. 213. Vide, generally, Bouv. Inst. Index, h.t.; 2 Root, 492; 3 Conn. 62; 1 Hamm. 187; 11 John. 513; 4 Conn. 428; 6 Conn. 373; 1 Halst. 190 4 N. H. Rep. 251 Co. Litt. 147 b; 1 Roll. Ab. 933 7 Vin. Ab. 367; 11 Vin. Ab. 461; 18 Vin. Ab. 493 to 515 3 Nels. Ab. 818; 14 Serg. & Rawle, 209; Bac. Ab. h.t.; 5 Whart. R. 541. Vide Discharge of a Debt.

References in periodicals archive ?
Statement of Financial Accounting Standard (SFAS) 4, Reporting Gains and Losses from Extinguishment of Debt (1975), was issued in response to public demand for better guidelines on reporting debt extinguishment.
Authoritative accounting principles for debt extinguishment gains and losses can be traced to the Committee on Accounting Procedure's 1953 Accounting Research Bulletin 43.
3 million was payable by the Northern Territory to the Ngaliwurru and Nungali people for the IMPAIRMENT OR impairment or extinguishment of native title over Timber Creek.
79 per diluted share, which includes the early extinguishment of debt.
The firm said it also anticipates that it will recognize a further gain on debt extinguishment of more than USD 3m when the remaining two aircraft are sold, which is expected to be in the first quarter of 2014.
99 per share on a diluted GAAP basis inclusive of the debt extinguishment expense.
When a change in conditions results in extinguishment of a perpetual conservation restriction, the donee organization "must be entitled to a portion of the proceeds at least equal to the proportionate value" of the conservation restriction (Regs.
In addition, we successfully completed the refinancing of our debt and expect interest savings over the next several years that will far exceed the loss we incurred on the early extinguishment of debt.
Extinguishment immediately releases a fine mist of water downstream, extinguishing sparks without interrupting production, and is said to greatly reduce the risk of personnel injury, equipment damage and downtime.
Chief Teie covers fireline safety, fire weather, topography and fuels, wildland fire behavior, fire extinguishment methods, initial attack strategy and tactics, the use of firefighting resources, wildland/urban firefighting strategy and tactics, incident command system, firefighting realities, and firefighting situations.
1502-13(g)(3), an intercompany obligation is generally deemed satisfied for all Federal income tax purposes if "a member realizes an amount (other than zero) from the assignment or extinguishment of all or part of its remaining rights or obligations under an intercompany obligation .