§ 52.006.Amount of Security for Money Judgment

The provision the chapter exists for, and it changed Texas appellate practice.

The base amount is the sum of three things: the compensatory damages awarded in the judgment, interest for the estimated duration of the appeal, and costs awarded in the judgment.

The most significant word in that list is "compensatory". Exemplary damages are excluded from the security, so a debtor facing a large punitive award need not secure it to appeal.

Interest is included because time passes. A judgment accrues interest during an appeal, and security covering only the principal would leave the creditor short by the time the appeal ended.

Subsection (b) is the cap, and it applies notwithstanding any other law or rule of court: the amount must not exceed the lesser of 50 percent of the judgment debtor’s net worth or $25 million.

The cap addressed a genuine problem. Before it, a judgment larger than a defendant’s means made an appeal impossible — the company could not post security, could not suspend enforcement, and was collected out of existence before any appellate court read the case.

"The lesser of" means the net worth limb often governs. A defendant worth $2 million posts at most $1 million, whatever the judgment says.

Subsection (c) goes further: on a showing that the debtor is likely to suffer substantial economic harm at the capped amount, the trial court shall lower the security to an amount that will not cause substantial economic harm.

That is mandatory relief on a showing, and it is the floor beneath the cap.

Subsection (d) confines appellate review: an appellate court may review the amount under Rule 24 but may not modify it to exceed what this section allows.

Subsection (e) is the creditor’s protection. A trial court may enjoin the debtor from dissipating or transferring assets to avoid satisfaction — but may not interfere with use, transfer, conveyance or dissipation in the normal course of business.