§ 77ooo. — Duties and responsibility of the trustee.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC77ooo]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2A--SECURITIES AND TRUST INDENTURES
SUBCHAPTER III--TRUST INDENTURES
Sec. 77ooo. Duties and responsibility of the trustee
(a) Duties prior to default
The indenture to be qualified shall automatically be deemed (unless
it is expressly provided therein that any such provision is excluded) to
provide that, prior to default (as such term is defined in such
indenture)--
(1) the indenture trustee shall not be liable except for the
performance of such duties as are specifically set out in such
indenture; and
(2) the indenture trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, in the absence of bad faith on the part of such trustee,
upon certificates or opinions conforming to the requirements of the
indenture;
but the indenture trustee shall examine the evidence furnished to it
pursuant to section 77nnn of this title to determine whether or not such
evidence conforms to the requirements of the indenture.
(b) Notice of defaults
The indenture trustee shall give to the indenture security holders,
in the manner and to the extent provided in subsection (c) of section
77mmm of this title, notice of all defaults known to the trustee, within
ninety days after the occurrence thereof: Provided, That such indenture
shall automatically be deemed (unless it is expressly provided therein
that such provision is excluded) to provide that, except in the case of
default in the payment of the principal of or interest on any indenture
security, or in the payment of any sinking or purchase fund installment,
the trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee, or a trust committee
of directors and/or responsible officers, of the trustee in good faith
determine that the withholding of such notice is in the interests of the
indenture security holders.
(c) Duties of the trustee in case of default
The indenture trustee shall exercise in case of default (as such
term is defined in such indenture) such of the rights and powers vested
in it by such indenture, and to use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(d) Responsibility of the trustee
The indenture to be qualified shall not contain any provisions
relieving the indenture trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that--
(1) such indenture shall automatically be deemed (unless it is
expressly provided therein that any such provision is excluded) to
contain the provisions authorized by paragraphs (1) and (2) of
subsection (a) of this section;
(2) such indenture shall automatically be deemed (unless it is
expressly provided therein that any such provision is excluded) to
contain provisions protecting the indenture trustee from liability
for any error of judgment made in good faith by a responsible
officer or officers of such trustee, unless it shall be proved that
such trustee was negligent in ascertaining the pertinent facts; and
(3) such indenture shall automatically be deemed (unless it is
expressly provided therein that any such provision is excluded) to
contain provisions protecting the indenture trustee with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the holders of not less than a
majority in principal amount of the indenture securities at the time
outstanding (determined as provided in subsection (a) of section
77ppp of this title) relating to 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.
(e) Undertaking for costs
The indenture to be qualified shall automatically be deemed (unless
it is expressly provided therein that any such provision is excluded) to
contain provisions to the effect that all parties thereto, including the
indenture security holders, agree that the court may in its discretion
require, in any suit for the enforcement of any right or remedy under
such indenture, or in any suit against the trustee for any action taken
or omitted by it as trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including
reasonable attorney's fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses
made by such party litigant: Provided, That the provisions of this
subsection shall not apply to any suit instituted by such trustee, to
any suit instituted by any indenture security holder, or group of
indenture security holders, holding in the aggregate more than 10 per
centum in principal amount of the indenture securities outstanding, or
to any suit instituted by any indenture security holder for the
enforcement of the payment of the principal of or interest on any
indenture security, on or after the respective due dates expressed in
such indenture security.
(May 27, 1933, ch. 38, title III, Sec. 315, as added Aug. 3, 1939, ch.
411, 53 Stat. 1171; amended Pub. L. 101-550, title IV, Sec. 414, Nov.
15, 1990, 104 Stat. 2730.)
Amendments
1990--Subsec. (a). Pub. L. 101-550, Sec. 414(1), (2), substituted
``The indenture to be qualified shall automatically be deemed (unless it
is expressly provided therein that any such provision is excluded) to''
for ``The indenture to be qualified may'' and ``the indenture trustee
shall examine'' for ``such indenture shall contain provisions requiring
the indenture trustee to examine''.
Subsec. (b). Pub. L. 101-550, Sec. 414(3), (4), substituted ``The
indenture trustee shall'' for ``The indenture to be qualified shall
contain provisions requiring the indenture trustee to'' and ``That such
indenture shall automatically be deemed (unless it is expressly provided
therein that such provision is excluded) to'' for ``That such indenture
may''.
Subsec. (c). Pub. L. 101-550, Sec. 414(3), substituted ``The
indenture trustee shall'' for ``The indenture to be qualified shall
contain provisions requiring the indenture trustee to''.
Subsec. (d)(1) to (3). Pub. L. 101-550, Sec. 414(5), substituted
``such indenture shall automatically be deemed (unless it is expressly
provided therein that any such provision is excluded) to'' for ``such
indenture may''.
Subsec. (e). Pub. L. 101-550, Sec. 414(1), substituted ``The
indenture to be qualified shall automatically be deemed (unless it is
expressly provided therein that any such provision is excluded) to'' for
``The indenture to be qualified may''.
Section Referred to in Other Sections
This section is referred to in sections 77jjj, 77kkk, 77mmm, 77rrr
of this title.
