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Template:M intro repack merger of debt: Difference between revisions
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Amwelladmin (talk | contribs) (Created page with "===What if the Issuer holds the Note?=== You may hear learned counsel caution against a structure whereby an issuer buys or holds for the time being its own debt securities. “This, ah, is problematic. In, er, theory. So to speak. As it were.” “Oh?” “Well, the debt. It might, um, ''merge''.” She will be a bit shoe-shuffly about this, the same way Anglicans are a bit shoe-shuffly about the more mystical bits of orthodoxy they are meant to subscribe to,...") |
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=== | ===“What if an Issuer holds its own Note?”=== | ||
Many inconveniences of structured finance issuance could be cured by parking an instrument for the time being with its own Issuer. Creating a structured product is large part a question of herding bureaucratic and yet strangely wilful cats. There are times where having the Note issued but safe, out of harm’s way, in the fridge; warehoused allows one to sort out oneself and one’s cats in tranquillity before putting the instrument back out to the market when the cats have had their say and it is prudent to do so. | |||
Yet your [[Private practice lawyer|counsel]] may instinctively cavil against the idea. | |||
“This, ah, is problematic. In, er, theory. So to speak. As it were.” | “This, ah, is problematic. In, er, theory. So to speak. As it were.” | ||
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“Oh?” | “Oh?” | ||
“Well, the [[debt]]. It might, um, ''merge''.” | “Well, there’s the [[debt]]. It might, um, ''merge''.” | ||
She will be a bit shoe-shuffly about this, the same way Anglicans are a bit shoe-shuffly about the more mystical bits of orthodoxy they are meant to subscribe to, but in practice don’t.<ref>The virgin birth, for example, or the existence of God. “Let us not quible about details, [[Nigel molesworth|molesworth]],” sa rev plum, “i preffer to think of this as [[Metaphor|metaphorical]]”.</ref> It is as if there is some [[deep magic]] in play here, but it has somehow become stale, or inert. | She will be a bit shoe-shuffly about this, the same way Anglicans are a bit shoe-shuffly about the more mystical bits of orthodoxy they are meant to subscribe to, but in practice don’t.<ref>The virgin birth, for example, or the existence of God. “Let us not quible about details, [[Nigel molesworth|molesworth]],” sa rev plum, “i preffer to think of this as [[Metaphor|metaphorical]]”.</ref> It is as if there is some [[deep magic]] in play here, but it has somehow become stale, or inert. | ||
=== The theory of | === The theory of “merger” === | ||
The theory is this: ''you cannot have a contract with yourself''. You cannot owe yourself money. If, therefore, you acquire your own [[promissory note]] — however you come by it, if you do — then at the point where you become its [[Bearer security|bearer]], ''there is no longer a [[debt]]''.<ref>Halsbury tells us, at 418, “In some circumstances a contract is discharged by merger when the rights and liabilities under the contract come together in the same person, the reason being that a person cannot maintain an action against {{sex|himself}}. Thus when the acceptor of a bill of exchange is or becomes the holder of it in his own right, at or after its maturity, the bill is discharged.” Hmmm. In fact the “reason being” is that this is what the [https://www.legislation.gov.uk/ukpga/Vict/45-46/61/part/II/crossheading/discharge-of-bill# Bills of Exchange Act 1882] specifically provided. And note: “''at or after maturity''”. </ref> It might somehow ''vanish''. | The theory is this: ''you cannot have a contract with yourself''. You cannot owe yourself money. If, therefore, you acquire your own [[promissory note]] — however you come by it, if you do — then at the point where you become its [[Bearer security|bearer]], ''there is no longer a [[debt]]''.<ref>Halsbury tells us, at 418, “In some circumstances a contract is discharged by merger when the rights and liabilities under the contract come together in the same person, the reason being that a person cannot maintain an action against {{sex|himself}}. Thus when the acceptor of a bill of exchange is or becomes the holder of it in his own right, at or after its maturity, the bill is discharged.” Hmmm. In fact the “reason being” is that this is what the [https://www.legislation.gov.uk/ukpga/Vict/45-46/61/part/II/crossheading/discharge-of-bill# Bills of Exchange Act 1882] specifically provided. And note: “''at or after maturity''”. </ref> It might somehow ''vanish''. | ||