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Daewoo America contends that there is no support for the proposition that a filing of Chapter 11 ( or its Korean equivalent ) by a guarantor ( Jindo Korea ) relieves the primary obligor ( Jindo America ) of its liabilities . The principal in the automobile context will generally insure the obligations undertaken in these contracts with a third party insurer , but remains the primary obligor to the consumer . This Statement requires that a liability be derecognized if and only if either ( a ) the debtor pays the creditor and is relieved of its obligation for the liability or ( b ) the debtor is legally released from being the primary obligor under the liability either judicially or by the creditor . FASB Statement No. 125 requires derecognition of a liability if and only if either ( a ) the debtor pays the creditor and is relieved of its obligation for the liability or ( b ) the debtor is legally released from being the primary obligor under the liability . Indicators such as inventory risk , credit risk , pricing risk and which party is the primary obligor to the customer are considered in the analysis . Hell or High Water Clause A guarantee , usually by a parent corporation or an unaffiliated guarantor , to meet bond or lease obligations if the primary obligor does not perform . Not more than five percent of the amortized value of all the investments of the Variable Annuity Account and of moneys in the account immediately available for investment may be invested in the obligations of or equities in a single , primary obligor or issuer . If a lender legally releases the transferor from being the primary obligor under a liability assumed by an SPE , the lender is , in fact , accepting a beneficial interest in the assets held by that SPE in exchange for the loan it previously held .