Commercial Law Thoughts On The Indenture Trustee’s Right To Sue

The establishment of indenture trustee is of great value to guarantee the interests of bond holders and enhance the efficiency of bond management.The trustee’s right to sue is the main authority of the indenture trustee,which is of great significance to the trustee’s active performance of its duties.However,in our country,there are still many unsolved problems around the trustee’s right to sue.At the theoretical level,how to explain the legal basis of the trustee’s right to sue is still controversial.At the same time,the relationship between the indenture trustee’s right to sue and the bondholder’s right to sue is still to be clarified,In addition,the restriction on the cause to sue and the special preservation authority of the indenture trustee have not been thoroughly understood.In practice,the Minutes of the National Courts Symposium on the Trial of Bond Disputes’ provisions on the arrangement and authority of indenture trustee’s litigation right are not reasonable enough,which may affect the trustee’s litigation in the future.Based on the particularity of the trustee’s right to sue,it is difficult to solve the above problems only from the perspective of procedural law.Therefore,this paper analyzes it from the perspective of commercial law.This paper aims to deepen the understanding of the trustee’s right to sue by revealing the root,setting meaning,significance,background and principle of the trustee’s right to sue.so as to help solve the current theoretical and practical problems.The main body is divided into four chapters.In Chapter One,questions discussed in this thesis are raised.The first section points out that there are disputes on the legal basis of the indenture trustee’s right to sue,which is,the dispute between the trust theory and the litigation responsibility theory.The second section points out that nowadays,the scope of indenture trustee’right to sue is not clear.To be specific,the cause of action is unclear,litigation authority is doubtful,and e whether the indenture trustee has the right of preservation before litigation is uncertain.Section three points out that the relationship between the trustee’s right to sue and the bondholder’s right to sue remains to be clarified.The arrangements for right to sue in bond disputes are different in various countries,and China’s arrangement also has its own uniqueness.How to understand the relationship between the trustee’s right to sue and the holder’s right to sue still calls for theoretically answers.Chapter Two discusses the commercial law foundation of the trustee’s right to sue,and the first section analyzes the root of the trustee’s right to sue.It points out that there is a congenital deficiency in the exercise of the right by the bondholders themselves,so it is necessary for the indenture trustee to exercise the right to sue.The second section explains the value of the trustee’s right to sue,pointing out that the indenture trustee’s exercise of the right to sue can make up for the deficiency of the bondholders’ lawsuit,and also has the advantages of simplifying the litigation procedure,facilitating the bond transfer and the exercise of the real right of security.The third section analyzes the applicability of the two theories that explain the indenture trustee’s right to sue from the perspective of commercial law,namely the trust theory and the litigation responsibility theory,and points out that the litigation responsibility theory should be applied to explain the trustee’s right to sue.Chapter Three explains the scope of the indenture trustee’s right o sue from the perspective of commercial law.The first section explains the reasons for limiting the cause of trustee’s right to sue to breach of contract.It is pointed out that if the trustee is allowed to bring a tort suit,it is difficult for the trustee to treat the bondholders in different circumstances equally and may face a conflict of interest.The second section explains the reasons for the expansion of the trustee’s litigation authority.It argues that the trustee should be given special authorization because of the public nature of the bondholder,the particularity of the trustee identity and the particularity of the bond litigation.The third section reveals the significance of the trustee’s special preservation rights.It is pointed out that this kind of authority is helpful to protect the interests of the bondholders,and also conforms to the requirements that the trustee should perform his duties actively.As a result,the right should be explicitly recognized in the legislation and judicatory of our country.Chapter Four analyzes the relationship between the trustee’s right to sue and the bondholder’s right to sue from the perspective of commercial law.The first section rethinks the relevant provisions in the Minutes.It puts forward that the coexistence of litigation rights will lead to the confusion of litigation procedure and unfair result of litigation.The second section reveals the collectivity of bondholders and further points out that the in indenture trustee shall exercise rights on behalf of all bondholders in order to protect their overall interests.The third section discusses the ways to protect the interests of minority holders under class action.Because collective action sacrifices the free will of individual holders,the laws of various countries protect the interests of holders in different ways,but all of them are insufficient.This paper suggests that China should protect the interests of minority holders by giving them more rights in proceedings.