§77ppp — Title 15 Commerce and Trade | U.S. Code

Summary

Makes bond contracts include rules that let bondholders control some actions. If the contract does not say otherwise, holders who own at least a majority in value of the bonds can direct the trustee about how to use remedies or can agree to forgive past defaults. The contract may also let holders who own at least 75 percent in value agree to delay an interest payment for up to three years. A bondholder’s right to get principal and interest on the due dates and to sue to collect those payments cannot be hurt without that holder’s consent, except for a consented delay of interest, limits on suing that would cause loss of the lien on secured property, or changes under section 5803 of Title 12. The borrower can set a record date to decide who may vote. Unless the contract says otherwise, that date is the later of 30 days before the first request for consent or the date of the most recent list of holders given to the trustee under section 77lll.

Title 15, §77ppp

Commerce and Trade — Source: USLM XML via OLRC

(a)The indenture to be qualified—

(1)shall automatically be deemed (unless it is expressly provided therein that any such provision is excluded) to contain provisions authorizing the holders of not less than a majority in principal amount of the indenture securities or if expressly specified in such indenture, of any series of securities at the time outstanding (A) to direct the time, method, and place of conducting any proceeding for any remedy available to such trustee, or exercising any trust or power conferred upon such trustee, under such indenture, or (B) on behalf of the holders of all such indenture securities, to consent to the waiver of any past default and its consequences; or

(2)may contain provisions authorizing the holders of not less than 75 per centum in principal amount of the indenture securities or if expressly specified in such indenture, of any series of securities at the time outstanding to consent on behalf of the holders of all such indenture securities to the postponement of any interest payment for a period not exceeding three years from its due date.

(b)Notwithstanding any other provision of the indenture to be qualified, the right of any holder of any indenture security to receive payment of the principal of and interest on such indenture security, on or after the respective due dates expressed in such indenture security, or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such holder, except—

(1)as to a postponement of an interest payment consented to as provided in paragraph (2) of subsection (a);

(2)that such indenture may contain provisions limiting or denying the right of any such holder to institute any such suit, if and to the extent that the institution or prosecution thereof or the entry of judgment therein would, under applicable law, result in the surrender, impairment, waiver, or loss of the lien of such indenture upon any property subject to such lien; and

(3)that the right of any holder of any indenture security to receive payment of the principal of and interest on such indenture security shall not be deemed to be impaired or affected by any change occurring by the application of section 5803 of title 12 to any indenture security.

(c)The obligor upon any indenture qualified under this subchapter may set a record date for purposes of determining the identity of indenture security holders entitled to vote or consent to any action by vote or consent authorized or permitted by subsection (a) of this section. Unless the indenture provides otherwise, such record date shall be the later of 30 days prior to the first solicitation of such consent or the date of the most recent list of holders furnished to the trustee pursuant to section 77lll of this title prior to such solicitation.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2022—Subsec. (b). Pub. L. 117–103 substituted “such holder, except—” for “such holder, except”, designated remainder of existing provisions as pars. (1) and (2), and added par. (3). 1990—Subsec. (a). Pub. L. 101–550, § 415(1)–(3), in introductory provisions struck out “may contain provisions” after “qualified”, in par. (1) inserted “shall automatically be deemed (unless it is expressly provided therein that any such provision is excluded) to contain provisions” before “authorizing the holders” and “or if expressly specified in such indenture, of any series of securities” after “principal amount of the indenture securities”, and in par. (2) inserted “may contain provisions” before “authorizing the holders” and “or if expressly specified in such indenture, of any series of securities” after “principal amount of the indenture securities”. Subsec. (b). Pub. L. 101–550, § 415(5), which directed the substitution of “of the indenture to be qualified” for “thereof”, was executed by making the substitution for “thereof” the first time appearing, as the probable intent of Congress. Subsec. (c). Pub. L. 101–550, § 415(6), added subsec. (c).

§77ppp Directions and waivers by bondholders; prohibition of impairment of holder’s right to payment; record date

Summary

Title 15, §77ppp

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata