5 points
Taxes. If by some stroke of miracle he wins the appeal, he won’t have to pay capital gains taxes that he otherwise would have had to pay if the portfolio was liquidated.
3 points
This. And to put numbers on it, long term cap gains taxes (for things in the account held for 2 years or more) is 20%. For short term (things in the account owned for less that 2 years) it can be as 37%. So if the account is just used as collateral, and Chubb charged a fee of less than 20% then the bond is a cheaper way to get the money for the appeal.
