Excluding fiduciary duties: how far should trustees be able to go? Lessons from bond issues

Excluding fiduciary duties: how far should trustees be able to go? Lessons from bond issues

 

This article considers the role of trustees, and the importance of their duties, specifically in the context of bond issues and structured finance.

Security and bond trustees, or their affiliates, often have interests in the Issuer’s debt or equity. This is problematic and can give rise to what would be breaches of fiduciary duty, but for duty defining clauses and exemption clauses. The policy question is: how free should parties be to waive their fiduciaries’ conflicts of interests? Waivers are particularly problematic when made in advance, in standard documentation, in respect of tradeable interests: bonds and loan participations. These clauses should be subject to greater statutory and judicial control.

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About the author:

Neeta started her legal career at Allen & Overy in 2008 in the midst of the global financial crisis and the collapse of Lehmans where she gained most of her paralegal experience.

Neeta also did a short stint in litigation at the Revenue and Customs Prosecutions Office in 2006. Neeta graduated with a 2:1 honours degree from University of London, Queen Mary College and went on to obtain a distinction from the College of Law in the Legal Practice. She has been working at Lexis Nexis since April 2013.