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- Title
The Importance of Being Bound: Bondholders' Vote and Workouts in the U.S. and in Italy.
- Authors
Prenestini, Francesca
- Abstract
When companies face financial distkss, it may be advan, tageous for all parties involved to T€St'rUCtuTe bond loans and to Tenegotiate the deal, for example, by converting the bonds into shares. Some legal systems do not allow the majority of bondholders to vote on the proposed agreement and, by doing so, to bind the dissenting minoTity Recent cont·roversies and litigation in the US. have Teignited the debate on the limits of this regime. This pap€T analyzes the drawbacks of the prohibitive approach. with particular regard to the judicial cases and the business practices of two major legal systems (the U.S. and Italy), argues that a rule that allows bondholders' vote on out-ofcourt restructurings Tepresents a much preferable option and suggests the solutions which, in the absence of such a mle, may be currently adopted.
- Subjects
UNITED States; BONDS (Finance); BONDHOLDERS; DEBT relief; BANKRUPTCY
- Publication
American Bankruptcy Law Journal, 2021, Vol 95, Issue 2, p313
- ISSN
0027-9048
- Publication type
Article