When a defendant loses at trial and appeals, filing the appeal alone does not stop the winning party from trying to collect, the losing party generally must post an appeal bond, also called a supersedeas bond, to stay enforcement while the appeal is pending. Courts typically set the bond amount at around 110% of the judgment, covering principal, accrued interest, and costs.
Because posting a bond of that size can tie up enormous amounts of a company's own cash or credit capacity, a specialized financing market exists to provide the collateral instead, typically cash, letters of credit, real estate, or marketable securities pledged to a surety, which then issues the bond. Premiums for the surety itself typically run 1-2% of the bond amount; the collateral financing layered on top carries its own separate cost of capital.
If the appeal succeeds, posted collateral is returned (though the premium itself is non-refundable); if it fails, the collateral is used to satisfy the underlying judgment. This makes appeal bond financing one of the more contained, event-driven products in the litigation finance toolkit, distinct from funding the underlying merits of a case.