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''Hands off the TIA,'' Law Professors Tell Senators

Eighteen distinguished professors of bankruptcy and corporate law expressed concern that a "proposed omnibus appropriations rider" could amend the Trust Indenture Act of 1939 ("TIA") "without any legislative hearings or opportunity for public comment." In a letter addressed to Senate and House leadership, the professors argued that the "hasty amendment of the Trust Indenture Act could have broad negative unintended consequences in the securities markets." Provisions of the TIA are intended to protect bond investors, they argue "by requiring any restructuring of bonds to occur subject to the transparency of a court supervised bankruptcy process, absent bondholder consent to a debt restructuring." The proposed amendments would narrowly define impairment of the right to payment and the right to institute suit for nonpayment and it would be retroactive to current litigation. Accordingly, the professors urged the congressional leaders to postpone any amendments to the TIA until after legislative hearings "enable more deliberate and careful consideration."


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