Assume the debt is 100,000 and the collateral is validly valued at the same amount. The pledgee causes an established, compensable loss of 20,000. In the simplified case, a reduction of 20,000 is reflected against the claim.
This illustration assumes that the full 20,000 is legally compensable. A real valuation must also address the relevant valuation date, the existing pledge liability, and the circumstances of injury.
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Worked example of pledgee-caused damage
Kitab al-Rahn: Manumission, Destruction and Liability for Injury
Assume the debt is 100,000 and the collateral is validly valued at the same amount. The pledgee causes an established, compensable loss of 20,000. In the simplified case, a reduction of 20,000 is reflected against the claim.
This illustration assumes that the full 20,000 is legally compensable. A real valuation must also address the relevant valuation date, the existing pledge liability, and the circumstances of injury.