English Trusts Law in United Kingdom
History of Trust Deeds
When the amount borrowed by a company is large, the company commonly executes a trust deed by way of further security.
The object of such a trust deed is twofold:
- it conveys specific property to the trustees of the deed by way of legal mortgage (the charge contained in the debentures is only an equitable security), and it further charges all the remaining assets in favour of the debenture-holders, with appropriate provisions for enabling them, in certain events similar to those expressed in the debenture conditions, to enforce the security, and for that purpose to enter into possession and carry on the business, or to sell it and distribute the proceeds;
- it organizes the debenture-holders and constitutes in the trustees of the deed a body of experienced business men who can watch over the interests of the debenture-holders and take steps for their protection if necessary.
In particular it provides machinery for the calling of meetings of debenture-holders by the trustees, 903 and empowers a majority of (say) two-thirds or three-fourths in number and value at such meeting to bind the rest to any compromise or arrangement with the company which such majorities may deem beneficial. This is found a very useful power, and may save recourse to a scheme or arrangement first sanctioned under the machinery of the Joint Stock Companies Arrangement Act 1870 (Companies Act 1908, § 120).(1)
Resources
Notes and References
- Encyclopedia Britannica (1911)
See Also
Further Reading
- English Trusts Law in the Encyclopedia of Britain
- English Trusts Law in the Osborn’s Concise Law Dictionary
- English Trusts Law in the Halsbury’s Laws of England
- English Trusts Law in the Stroud’s Judicial Dictionary of Words and Phrases
- English Trusts Law in the Jowitt’s Dictionary of English Law
- English Trusts Law in the New Oxford Companion to Law
- English Trusts Law in the Words and Phrases Legally Defined
- English Trusts Law in the Oxford Dictionary of Law
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