§77ppp Directions and Waivers by Bondholders; Prohibition of Impairment of Holder’s Right to Payment; Record Date

Summary

Lets holders of the bonds do two main things. If the indenture does not say otherwise, holders of at least a majority in principal amount of the outstanding bonds (or of a series, if the indenture says so) can direct how the trustee handles enforcement actions and can agree to forgive past defaults. The indenture may also let holders of at least 75 percent in principal amount agree to postpone an interest payment for up to three years. When counting votes or consents, bonds owned by the party that owes the bonds or by its parents, subsidiaries, or companies under common control are ignored. But for the trustee’s protection, only bonds the trustee actually knows are so owned are ignored. A bondholder’s right to get principal and interest when due, or to sue to enforce that payment, cannot be cut off without that holder’s consent, except for the allowed interest postponement, limitations on suing if a suit would cause loss of the lien under law, and changes made by application of section 5803 of title 12. The issuer may set a record date to decide who can vote or consent. Unless the indenture says otherwise, that date is whichever is later: 30 days before the first solicitation or the date of the most recent list of holders given to the trustee under section 77lll.