Clifford Chance

Noteholder Meetings: Paying the Price for Change?

31 May 2012

In a recent decision, the English court has confirmed that payments offered to holders of debt securities in return for their consent to amendments to the terms of the notes are not bribes or illegal where they are made openly to all noteholders and no noteholders are prevented from voting. Payments only to those noteholders who vote in favour of a resolution are permissible and do not breach the requirement to treat note holders as a class and distribute any payments pari passu.

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