Abstract
The bondholder’s trustee is an agent that will manage the bond contract between the issuer and the investors. The main reason for the existence of the bondholder’s trustee is to reduce the general conflict of interests between debtholders and shareholders. Another important role of the bondholder’s trustee is in the case of default, because reducing the expected costs of financial distress may decrease potential losses incurred by the bondholders. However, only recently the inadequacy of the current bondholder’s trustee in different legal cultures has been criticised and, in the German case, also amended.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Amihud Y, Garbade K, Kahan M (2000) An institutional innovation to reduce the agency costs of public corporate bonds. J Appl Corp Financ 13:114–121
Bazzana F, Broccardo E (2013) The role of bondholder coordination in freeze-out exchange offers. J Financ Manag Market Institut 1:67–84
Bazzana F, Palmieri M (2012) How to increase the efficiency of bond covenants: a proposal for the Italian corporate market. Eur J Law Econ 34:327–346
Berger A, Udell G (1990) Collateral, loan quality, and bank risk. J Monet Econ 25:21–42
Bratton W (2006) Bond covenants and creditor protection: economics and law, theory and practice, substance and process. Eur Bus Org Law Rev (EBOR) 1:39–87
Demiroglu C, James C (2010) The information content of bank loan covenants. Rev Financ Stud 23:3700–3737
Diamond D (1984) Financial intermediation and delegated monitoring. Rev Econ Stud 51:393–414
Elkamhi R, Ericsson J, Parsons CA (2012) The cost and timing of financial distress. J Financ Econ 105:62–81
Haeseler S (2010) Trustee versus fiscal agents and default risk in international sovereign bonds. Eur J Law Econ 34:425–448
Haldane AG, Penalver A, Saporta V, Shin HS (2005) Analytics of sovereign debt restructuring. J Int Econ 65:315–333
Jensen MC, Meckling WH (1976) Theory of the firm: Managerial behavior, agency costs and ownership structure. J Financ Econ 3:305–360
Myers SC (1977) Determinants of corporate borrowing. J Financ Econ 5:147–175
Schwarcz SL, Sergi GM (2008 Bond defaults and the dilemma of the indenture trustee. Ala Law Rev 59:1037–1073
Smith CW Jr (1993) A perspective on accounting-based debt covenant violations. Account Rev 68:289–303
Viswanath P, Eastman W (2003) Bondholder-stockholder conflict: contractual covenants vs court-mediated ex-post settling-up. Rev Quant Financ Account 21:157–177
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 Springer Science+Business Media, LLC, part of Springer Nature
About this entry
Cite this entry
Bazzana, F. (2019). Bondholder’s Trustee. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7753-2_78
Download citation
DOI: https://doi.org/10.1007/978-1-4614-7753-2_78
Published:
Publisher Name: Springer, New York, NY
Print ISBN: 978-1-4614-7752-5
Online ISBN: 978-1-4614-7753-2
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences