May 14, 2020

Indentures

Indentures

Bondholders and Corporate Governance
      Morey W. McDaniel, 41(2): 413–60 (Feb. 1986)
Contrary to popular belief, indentures do not have numerous, detailed covenants to protect bondholders. Other legal and market constraints on stockholder gain at bondholder expense are ineffective. Therefore, directors should have fiduciary duties to protect bondholders as well as stockholders.

Modifying Debt Securities: The Search for the Elusive "New Security" Doctrine
      Bryant B. Edwards and Jon J. Bancone, 47(2): 571–610 (Feb. 1992)
Contrary to positions taken in numerous no-action letters, the SEC staff in recent months has used the "new security" doctrine to require Securities Act registration of many debt security modifications previously considered not to result in the creation of new securities. After examining the statutory scheme and the case law on this topic, the authors conclude that there is no basis for application of a new security doctrine to modifications of debt securities that can be made with less than unanimous bondholder consent in accordance with typical indenture amendment provisions.

Revised Model Simplified Indenture
      Ad Hoc committee for Revision of the 1983 Model Simplified Indenture, 55(3): 1115–1226 (May 2000)
In 1983, a committee of the Section published a Model Simplified Indenture, including explanatory notes, as an aid to counsel to issuers, trustees, and debt holders. See Model Simplified Indenture, 38 BUS. LAW. 741 (1983). This Article presents a revised Model Simplified Indenture, also including explanatory notes, which attempts to update the 1983 MSI to reflect developments in the law related to indentures as well as the experience of practitioners, particularly during the late 1980s and early 1990s, when a series of issuer defaults led to significant litigation and corporate restructurings. The revised Model Simplified Indenture collects in one place a set of simplified basic indenture provisions and related case and other references in the hope that it will be a useful research tool as well as providing a basic form of indenture that may be modified to fit various circumstances.

Model Negotiated Covenants and Related Definitions
     committee on Trust Indentures and Indenture Trustees, ABA Section of Business Law, 61(4):1439-1540 (August 2006)

United We Stand: Antitrust Aspects of Collaboration Among Corporate Bondholders
      Ali M. Stoeppelwerth, 67(2): 393 - 404 (February 2012)
Many observers over the years have commented on the various tactics employed by issuers of corporate debt seeking to restructure or repurchase their securities and the potentially coercive effects of these actions on bondholders. In response to issuer actions of this sort, large bondholders of a particular security often band together in groups or committees to try and negotiate collectively with the issuer and obtain more favorable terms. In some circumstances, these collaborations bring together firms that may be considered competitors in some aspects of their businesses and have on occasion been challenged as unlawful price-fixing agreements or group boycotts under Section 1 of the Sherman Act. This article reviews the opinions in those cases and discusses the antitrust implications of collective action by bondholders or their representatives in dealings with a common issuer.