Page:United States Statutes at Large Volume 53 Part 2.djvu/687

 53 STAT.] 76TH CONG., 1ST SESS. -CH. 411-AUG. 3, 1939 cash, securities, or other property, but shall not include any such dis- tribution with respect to the secured portion, if any, of such claim. The court in which such bankruptcy, receivership, or proceeding for reorganization is pending shall have jurisdiction (i) to apportion between the indenture trustee and the indenture security holders, in accordance with the provisions of this paragraph, the funds and property held in such special account and the proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distributions to be made to the indenture trustee and the indenture security holders with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any such claim, or to make a specific allocation of such distributions as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical formula. "Any indenture trustee who has resigned or been removed after the beginning of such four months' period shall be subject to the pro- visions of this subsection as though such resignation or removal had not occurred. Any indenture trustee who has resigned or been removed prior to the beginning of such four months' period shall be subject to the provisions of this subsection if and only if the following conditions exist- "(i) the receipt of property or reduction of claim which would have given rise to the obligation to account, if such indenture trustee had continued as trustee, occurred after the beginning of such four months' period; and "(ii) such receipt of property or reduction of claim occurred within four months after such resignation or removal. "As used in this subsection, the term 'default' means any failure to make payment in full of principal or interest, when and as the same becomes due and payable, under any indenture which has been quali- fied under this title, and under which the indenture trustee is trustee and the person of whom the indenture trustee is directly or indirectly a creditor is an obligor; and the term 'indenture security holder' means all holders of securities outstanding under any such indenture under which any such default exists. "(b) The indenture to be qualified may contain provisions exclud- ing from the operation of subsection (a) of this section a creditor relationship arising from- "(1) the ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acquisition by the indenture trustee; "(2) advances authorized by a receivership or bankruptcy court of competent jurisdiction, or by the indenture, for the pur- pose of preserving the property subject to the lien of the inden- ture or of discharging tax liens or other prior liens or encum- brances on the trust estate, if notice of such advance and of the circumstances surrounding the making thereof is given to the indenture security holders, at the time and in the manner pro- vided in the indenture; "(3) disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depositary, or other similar capacity; "(4) an indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction as defined in the indenture; 98907° -39 -PT 2 -- -42 1163 Items not included. Court jurisdiction. Apportionment be- tween trustee and security holders of funds in special ac- count, etc. Consideration in de- termining fairness of distributions made to trustee, etc. Resignations, etc., provisions governing. "Default" defined. "Indenture security holder." Exclusions, credi- tor relationship aris- ing from specified classes. Certain securities having maturity of one year or more. Advances author- ized by receivership, etc. Advance notice to be given. Disbursements in ordinary business. Personal services, rents, etc.

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