Suppose A has a claim against B. B has a claim over against C. B, however, is insolvent and has not actually paid A. B's only asset is, in fact, B v C. To what extent can C claim that B v C is valueless - that B was not damaged because B was too broke to pay A?

This paper argues that the fundamental legal distinction between indemnity and liability is beginning to dissolve, because B can always pay A (and thereby give value to B v C) by borrowing the amount B owes and using B v C as collateral for the loan. This very possibility tends to render the distinction between indemnity and liability obsolete.