U.S. Code » Title 15 » Chapter CHAPTER 2A— SECURITIES AND TRUST INDENTURES › Subchapter SUBCHAPTER III— TRUST INDENTURES

15 U.S.C. § 77ppp

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

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(a) Directions and waivers by bondholdersThe 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.For the purposes of this subsection and paragraph (3) of subsection (d) of section 77ooo of this title, in determining whether the holders of the required principal amount of indenture securities have concurred in any such direction or consent, indenture securities owned by any obligor upon the indenture securities, or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with any such obligor, shall be disregarded, except that for the purposes of determining whether the indenture trustee shall be protected in relying on any such direction or consent, only indenture securities which such trustee knows are so owned shall be so disregarded.(b) Prohibition of impairment of holder’s right to paymentNotwithstanding 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) Record date

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.

(May 27, 1933, ch. 38, title III, § 316, as added Aug. 3, 1939, ch. 411, 53 Stat. 1172; amended Pub. L. 101–550, title IV, § 415, Nov. 15, 1990, 104 Stat. 2731; Pub. L. 117–103, div. U, § 108, Mar. 15, 2022, 136 Stat. 832.)Editorial NotesAmendments

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).

Notes of Decisions
Cited in 39 cases (1 in the last 5 years), 1946–2021 · leading case: Marblegate Asset Mgmt., LLC v. Educ. Mgmt. Fin. Corp., 846 F.3d 1 (2d Cir. 2017).
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Marblegate Asset Mgmt., LLC v. Educ. Mgmt. Fin. Corp., 846 F.3d 1 (2d Cir. 2017). · cites it 11× “15 U.S.C. § 77ppp(a). . The eight-part report was entitled "Report on the Study and Investigation of the Work, Activities, Personnel, and Functions of Protective and Reorganization Committees.”
Argo Fund Ltd. v. Bd. of Directors of Telecom Argentina, S.A. (In Re Bd. of Directors of Telecom Argentina, S.A.), 528 F.3d 162 (2d Cir. 2008). · cites it 3× “public policy considerations manifest in the Trust Indenture Act of 1939, 15 U.S.C. § 77ppp(b), the best interests of the creditor test, 11 U.”
Bank of New York v. First Millennium, Inc., 607 F.3d 905 (2d Cir. 2010). “The FDIC observes that the language of the notwithstanding clause is similar to Section 316(b) of the TIA, 15 U.S.C. § 77ppp(b), a statutory provision requiring that bond indentures protect minority bondholders by prohibiting majority bondholders from collusively agreeing to…”
Brady v. UBS Fin. Servs., Inc., 538 F.3d 1319 (10th Cir. 2008). · cites it 2× “12 provides a separate remedy on which the statute of limitations has not run.”
Marblegate Asset Mgmt., LLC v. Educ. Mgmt. Corp., 111 F. Supp. 3d 542 (S.D.N.Y. 2015). · cites it 6× “See 15 U.S.C. § 77ppp(a)(2). . Given that the SEC has not claimed interpretive authority here, any Chevron-style argument is appropriately absent from Defendants' and Intervenors’ briefing.”
Great Plains Trust Co. v. Union Pac. R.R., 492 F.3d 986 (8th Cir. 2007). “This provision implements Section 316(b) of the Trust Indenture Act of 1939 (15 U.S.C. § 77ppp(b)), which prohibits the purported restriction by an indenture of certain rights of security holders, including the right to sue for unpaid interest.”
Quadrant Structured Prods. Co. v. Vertin, 16 N.E.3d 1165 (NY 2014). “Defendants appear to argue that the enactment of the Trust Indenture Act of 1939 (TIA) eliminated the need to reference the securities in a no-action clause because the TIA prohibits the clause from barring a securityholder’s action against the Trustee for breach of duties…”
Phoenix Light SF Ltd. v. Deutsche Bank Nat'l Trust Co., 172 F. Supp. 3d 700 (S.D.N.Y. 2016). “” 15 U.S.C. § 77ppp(b); SAC ¶ 174. The plaintiffs argue that if Deutsche Bank had satisfied its duties, the plaintiffs would not have incurred the losses attributable to the defaults of the defective loans.”
Marblegate Asset Mgmt. v. Educ. Mgmt. Corp., 75 F. Supp. 3d 592 (S.D.N.Y. 2014). · cites it 2× “07 the Notes receive the same protections provided for in Section 316(b) of the Act, 15 U.S.C. § 77ppp(b): Rights of Holders of Notes to Receive Payment.”
Upic & Co. v. Kinder-Care Learning Centers, Inc., 793 F. Supp. 448 (S.D.N.Y. 1992). · cites it 2× “Section 316(b) expressly prohibits use of an indenture that permits modification by majority securityholder vote of any core term of the indenture, i.”
RBC Capital Markets, LLC v. Educ. Loan Trust IV, 87 A.3d 632 (Del. 2014). “The "absolute and unconditional” right of a noteholder to pursue unpaid principal or interest is a requirement of § 316 of the Trust Indenture Act, 15 U.S.C. § 77ppp(b). See McMahan & Co. v.”
McMahan & Co. v. Wherehouse Ent., Inc., 859 F. Supp. 743 (S.D.N.Y. 1994). · cites it 2× “” 15 U.S.C. § 77ppp(b); see footnote j,. Section 316(b) pertains to events of payment default where a company has failed to pay out on an indenture security after its maturity date or after an explicit date on which it has come due — in other words, when the right to payment…”
Show all 39 citing cases →
— 15 U.S.C. § 77ppp(a) — 6 cases
Marblegate Asset Mgmt., LLC v. Educ. Mgmt. Fin. Corp., 846 F.3d 1 (2d Cir. 2017). “15 U.S.C. § 77ppp(a). . The eight-part report was entitled "Report on the Study and Investigation of the Work, Activities, Personnel, and Functions of Protective and Reorganization Committees.”
MeehanCombs Global Credit Opportunities Funds, LP v. Caesars Ent. Corp., 80 F. Supp. 3d 507 (S.D.N.Y. 2015).
CIBC Bank & Trust Co. v. Banco Cent. Do Brasil, 886 F. Supp. 1105 (S.D.N.Y. 1995).
Meehancombs Global Credit Opportunities Master Fund, LP v. Caesars Ent. Corp., 162 F. Supp. 3d 200 (S.D.N.Y. 2015).
BOKF, N.A. v. Caesars Ent. Corp., 144 F. Supp. 3d 459 (S.D.N.Y. 2015).
— 15 U.S.C. § 77ppp(a)(1) — 1 case
Tennenbaum Living Trust v. GCDI S.A. (S.D.N.Y. 2021).
— 15 U.S.C. § 77ppp(a)(2) — 2 cases
Marblegate Asset Mgmt., LLC v. Educ. Mgmt. Fin. Corp., 846 F.3d 1 (2d Cir. 2017). “15 U.S.C. § 77ppp(a). . The eight-part report was entitled "Report on the Study and Investigation of the Work, Activities, Personnel, and Functions of Protective and Reorganization Committees.”
Marblegate Asset Mgmt., LLC v. Educ. Mgmt. Corp., 111 F. Supp. 3d 542 (S.D.N.Y. 2015). “See 15 U.S.C. § 77ppp(a)(2). . Given that the SEC has not claimed interpretive authority here, any Chevron-style argument is appropriately absent from Defendants' and Intervenors’ briefing.”
— 15 U.S.C. § 77ppp(b) — 32 cases
Marblegate Asset Mgmt., LLC v. Educ. Mgmt. Fin. Corp., 846 F.3d 1 (2d Cir. 2017). “15 U.S.C. § 77ppp(a). . The eight-part report was entitled "Report on the Study and Investigation of the Work, Activities, Personnel, and Functions of Protective and Reorganization Committees.”
Argo Fund Ltd. v. Bd. of Directors of Telecom Argentina, S.A. (In Re Bd. of Directors of Telecom Argentina, S.A.), 528 F.3d 162 (2d Cir. 2008). “public policy considerations manifest in the Trust Indenture Act of 1939, 15 U.S.C. § 77ppp(b), the best interests of the creditor test, 11 U.”
Bank of New York v. First Millennium, Inc., 607 F.3d 905 (2d Cir. 2010). “The FDIC observes that the language of the notwithstanding clause is similar to Section 316(b) of the TIA, 15 U.S.C. § 77ppp(b), a statutory provision requiring that bond indentures protect minority bondholders by prohibiting majority bondholders from collusively agreeing to…”
Brady v. UBS Fin. Servs., Inc., 538 F.3d 1319 (10th Cir. 2008). “12 provides a separate remedy on which the statute of limitations has not run.”
Great Plains Trust Co. v. Union Pac. R.R., 492 F.3d 986 (8th Cir. 2007). “This provision implements Section 316(b) of the Trust Indenture Act of 1939 (15 U.S.C. § 77ppp(b)), which prohibits the purported restriction by an indenture of certain rights of security holders, including the right to sue for unpaid interest.”
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