Abstract:
Under English law, bond trustees only have a limited duty to monitor the performance of the issuer. In contrast, New Zealand law requires trustees appointed for publicly issued bonds to continuously exercise reasonable diligence to ascertain whether the issuer has complied with the trust deed provisions, and whether the issuer’s assets are sufficient to discharge the amounts owed under the bonds. This article discusses two recent New Zealand cases on the duties of bond trustees, and argues that the New Zealand approach is inherently vague and difficult to comply with in practice.
