Bonds governed under German law would normally not contain collective action clauses, ie provisions dealing with majority decisions by bondholders by which certain bond terms may be altered or waived. This is because it is uncertain whether, in the absence of a statutory basis, a decision taken by a majority of bondholders would be binding upon a dissenting minority. For certain circumstances, however, a statutory basis exists in the form of a law enacted in 1899 which, during the last decades, has been very rarely used. This paper discusses in what cases the law may be invoked, what decisions can be made by bondholders and what procedural requirements must be observed for getting to a binding and unchallengeable decision.
Haag, H. and Weiβ, D. (2004), "Collective action with respect to bonds issued under German law", Journal of Financial Regulation and Compliance, Vol. 12 No. 2, pp. 111-117. https://doi.org/10.1108/13581980410810722
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