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Did the debentures survive the conversions?
Petitioners and respondent agree that the rights and
obligations of Metals, RMECC, and the debenture holders are
governed by the terms of the indenture.
Under the terms of the indenture, cancellation of debentures
occurs in a circumscribed manner. Section 1.01 (supra p. 8)
provides that debentures are outstanding until they have been
canceled or delivered for that purpose to the indenture trustee.
Under the terms of the indenture, Metals was obligated to
exchange its stock for the debentures, upon their submission by
the debenture holders. Section 2.08 (supra p. 9) states that
such acquisition by Metals "shall not operate as a redemption or
satisfaction of the indebtedness represented by such Debentures
unless and until the same are delivered to the Trustee for
cancellation."
There are further indications that the parties clearly
contemplated that converted debentures would exist after
conversion. Thus, section 4.12 (supra p. 9) provides: "Converted
Debentures shall not be further convertible into Common Stock of
* * * [Metals], and shall not be redeemable, * * * unless all
Debentures at the time outstanding shall be redeemed at the same
time."
The several provisions of Article Five, cited by respondent,
admittedly treat converted debentures differently from other
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