[1940] Ch. 18 PROTECTIVE COVENANTS AND REMEDIES OF SENIOR SECURITY HOLDERS
1 year, 8 months ago

TLDR:
The chapter discusses provisions to protect bond and preferred stockholders, remedies for nonfulfillment of a company's obligations, and recent laws to speed up the readjustment process for insolvent companies. The article highlights the contradictory legal rights of bondholders, the tendency for securities of insolvent companies to sell below their fair value, and various restructuring arrangements. The Trust Indenture Act of 1939 aimed to correct inadequacies and abuses in bond trustees' duties, while the solution to the protective committee problem lies in the trustee actively protecting the bond issue and selecting a group of qualified bondholders to represent the issue.

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