Paid into Court

Definition - What does Paid into Court mean?

Paid into court means that money has been paid by a party to the court; however, this money has not been designated to a specific party yet. Such a phenomenon can happen when someone knows that they owe money, but not to whom because a lawsuit is still taking place. So, the court will hold the money and then distribute it according to the results of the lawsuit.

Justipedia explains Paid into Court

Situations where money is paid into court often involve disputes about which entity has the legal right to receive the payments. For example, a company may be in the process of a hostile takeover of another company. The two companies may be suing each other during this process. So, someone who owes money to the company that is being taken over may pay it into court, because it may be unclear which company has the legal right to that payment. The result of the lawsuit could determine the answer.

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