CHAPTER 548
FORMERLY
SENATE SUBSTITUTE NO. 1
FOR
SENATE BILL NO. 332
AN ACT TO AMEND CHAPTER 38, TITLE 12 OF THE DELAWARE CODE RELATING TO BUSINESS TRUSTS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend §380 I (a), Title 12 of the Delaware Code by deleting the words "trust instrument" in clause (i) thereof and substituting in lieu thereof the words "governing instrument".
Section 2. Amend §3801(1), Title 12 of the Delaware Code by deleting the word "and" as it appears at the end of paragraph (I) thereof; by deleting the "." as it appears at the end of paragraph (2) thereof and substituting in lieu thereof "; and"; and by adding a new paragraph 13) to read as follows:
"(3) may contain any provision that is not inconsistent with law or with the information contained in the certificate of trust."
Section 3. Amend §3803, Title 12 of the Delaware Code by adding a new subsection (d) thereto to read as follows:
"(d) No obligation of a beneficial owner or trustee of a business trust to the business trust arising under the governing instrument or a separate agreement in writing. and no note, instrument or other writing evidencing any such obligation of a beneficial owner or trustee, shall be subject to the defense of usury, and no beneficial owner or trustee shall interpose the defense of usury with respect to any such obligation in an) action."
Section 4. Amend §3804(g), Title 12 of the Delaware Code by adding a new sentence thereto to read as follows:
"The Court of Chancery shall have jurisdiction over business trusts to the same extent as it has jurisdiction over common law trusts !brined under the laws of the State of Delaware."
Section 5. Amend §3808, Title 12 of the Delaware Code by adding new subsections (c) through (e) thereto to read as follows:
"(c) In the event that it business trust does not have perpetual existence, a business trust is dissolved and its affairs shall be wound up at the time or upon the happening of events specified in the governing instrument.
(d) Upon dissolution of a business trust and until the filing of a certificate 01 cancellation as provided in §3810 of this Chapter. the persons who under the governing instrument of the business trust are responsible for winding up the business trust's affairs may, in the name of, and for and on behalf of, the business trust, prosecute and defend suits, whether civil, criminal or administrative, gradually settle and close the business trust business, dispose of and convey the business trust property, discharge or make reasonable provision for the business trust liabilities, and distribute to the beneficial owners any remaining assets of the business trust.
(e) A business trust which has dissolved shall pay or make reasonable provision to pay all claims and obligations, including all contingent, conditional or unmatured claims and obligations, known to the business trust and all claims and obligations which are known to the business trust but for which the identity of the claimant is unknown. If there are sufficient assets, such claims and obligations shall be paid in fb11 and any such provision for payment shall be made in full. If there are insufficient assets, such claims and obligations shall be paid or provided for according to their priority and, among claims and obligations of equal priority, ratably to the extent of assets available therefor. Unless otherwise provided in the governing instrument of a business trust, any remaining assets shall be distributed to the beneficial owners. Any person, including any trustee, who under the governing instrument of the business trust is responsible for winding up a business trust's affairs who has complied with this subsection shall not be personally liable to the claimants of the dissolved business trust by reason of such person's actions in winding up the business trust."
Section 6. Amend §3810(a), Title 12 of the Delaware Code by redesignating paragraph "(2)" thereof as paragraph "(3)" thereof and by adding a new paragraph (2) to read as follows:
"(2) A business trust is formed at the time of the filing of the initial certificate of trust in the Office of the Secretary of State or at any later date or time specified in the certificate of trust if, in either case, there has been substantial compliance with the requirements of this section."
Section 7. Amend §3809, Title 12 of the Delaware Code by deleting the words "for purposes of taxation under Title 30 of this Code" and substituting in lieu thereof the words "for purposes of any tax imposed by this State or any instrumentality, agency or political subdivision of this State."
Section 8. Amend §3810(b)(2), Title 12 of the Delaware Code by striking the first sentence of said subsection in its entirety and substituting in lieu thereof a new sentence to read as follows:
"Except to the extent otherwise provided in the certificate of trust or in the governing instrument of a business trust, a certificate of trust may be amended at any time for any purpose as the trustees may determine."
Section 9. Amend §3810, Title 12 of the Delaware Code by adding new subsections (e) and (f) thereto to read as follows:
"(e) Whenever any certificate authorized to be tiled with the Office of the Secretary of State under any provision of this Chapter has been so filed and is an inaccurate record of the action therein referred to, or was defectively or erroneously executed, such certificate may be corrected by filing with the Office of the Secretary of State a certificate of correction of such certificate. The certificate of correction shall specify the inaccuracy or defect to be corrected, shall set forth the portion of the certificate in corrected form and shall be executed and filed as required by this Chapter. In lieu of filing a certificate of correction the certificate may be corrected by tiling with the Office of the Secretary of State a corrected certificate which shall be executed and filed in accordance with this Chapter, The corrected certificate shall be specifically designated as such in its heading, shall specify the inaccuracy or defect to be corrected, and shall set forth the entire certificate in corrected form. The corrected certificate shall be effective as of the date the original certificate was filed, except as to those persons who are substantially and adversely affected by the corrections, and as to those persons the corrected certificate shall be effective from the filing date.
(f) If any certificate filed in accordance with this Chapter provides for a future effective date or time and if the transaction is terminated or amended to change the future effective date or time prior to the future effective date or time, the certificate shall be terminated or amended by the filing, prior to the future effective date or time set forth in such original certificate, of a certificate or termination or amendment of the original certificate, executed and tiled in accordance with this Chapter, which shall identify the original certificate which has been terminated or amended and shall state that the original certificate has been terminated or amended."
Section 10. Amend §3811(a)(2), Title 12 of the Delaware Code by adding after the words "A certificate of amendment" the words ", a certificate of correction, a certificate of termination or amendment, and a restated certificate of trust".
Section 11. Amend §3811(a)(4). Title 12 of the Delaware Code by adding at four places in said subsection immediately following the words "certificate of merger or consolidation", the words "or certificate of termination or amendment of a merger or consolidation".
Section 12. Amend §3811, Title 12 of the Delaware Code by redesignating subsection "(b)" thereof as subsection "(c)" thereof and by adding new subsection (h) thereto, to read as follows:
"(b) Unless otherwise provided in the governing instrument, any person may sign any certificate or amendment thereof or enter into a governing instrument or amendment thereof by any agent, including any attorney-in-fact. An authorization, including a power of attorney, to sign any certificate or amendment thereof or to enter into a governing instrument or amendment thereof need not be in writing, need not be sworn to, verified or acknowledged, and need not be tiled in the Office of the Secretary of State, but if in writing, must be retained by the business trust or a trustee or other person authorized to manage the business and affairs of the business trust."
Section 13. Amend §3812, Title 12 of the Delaware Code by striking said section in its entirety and substituting in lieu thereof a new section to read as follows:
"§3812. Filing of Certificate.
(a) Any certificate authorized to be filed with the Office of the Secretary of State under any provision of this Chapter (or any judicial decree of amendment or cancellation) shall be delivered to the Office of the Secretary of State for filing A person who executes a certificate as an agent or fiduciary need not exhibit evidence of his authority as a prerequisite to filing. lnless the Secretary of State finds that any certificate does not conform to law, upon receipt of all filing fees required by law he shall:
(1) Certify that the certificate or any judicial decree of amendment or cancellation) has been filed in his office by endorsing upon the filed certificate (or judicial decree) the word "Filed", and the date and hour of the filing. This endorsement is conclusive of the date and time of its filing in the absence of actual fraud;
(1) File and index the endorsed certificate (or judicial decree); and
(2) Prepare and return to the person who tiled it or his
representative a copy of the filed certificate (or judicial decree), similarly endorsed, and shall certify such copy as a true copy of the tiled certificate (or judicial decree).
(b) Upon the filing of a certificate of trust in the Office of the Secretary of State, or upon the future effective date or time of a certificate of trust as provided for therein, the certificate of trust shall be effective. Upon the filing of a certificate of amendment (or judicial decree of amendment), certificate of correction, corrected certificate, or restated certificate in the Office of the Secretary of State, or upon the future effective date or time of a certificate of amendment (or judicial decree of amendment) or restated certificate as provided for therein. the certificate of trust shall be amended or restated as set forth therein. Upon the filing of a certificate of cancellation (or a judicial decree thereof) or a certificate of merger or consolidation which acts as a certificate of cancellation in the Office of the Secretary of State. or upon the future effective date or time of a certificate of cancellation (or a judicial decree thereof) or a certificate of merger or consolidation which acts as a certificate of cancellation, as provided for therein. the certificate of trust shall he canceled. Upon the filing of a certificate of termination or amendment, the original certificate identified in the certificate of termination or amendment shall he terminated or amended, as the case may be.
(c ) A fee as set forth in §3813(a)(2) of this fide shall he paid at the time of the filing of a certificate of trust.-a certificate of amendment, a certificate of correction, a corrected certificate, a certificate of termination or amendment, a certificate of cancellation, a certificate of merger or consolidation or a restated certificate.
(d) A fee as set forth in §38 3(a)) 3) of this Title shall he paid for a certified copy of any certificate on file as provided for by this Chapter, and a fee as set forth in §3813(a)(41 of this Title shall he paid for each page copied.
(e) Any signature on any certificate authorized to be tiled with the Secretary of State under any provision of this Chapter may be a facsimile, a conformed signature or an electronically transmitted signature. Any such certificate may he tiled by telecopy, fax or similar electronic transmission: provided, however, that the Secretary of State shall have no obligation to accept such tiling if such certificate is illegible or otherwise unsuitable for processing.
(f) The fact that a certificate of trust is on file in the Office of the Secretary of State is notice that the entity formed in connection with the tiling of the certificate of trust is a business trust formed under the laws of the State of Delaware and is notice of all other facts set forth therein which are required to he set forth in a certificate of trust by §3810(a)) 11 and (2) of this Title and is notice of the limitation on liability of a series of a business trust which is permitted to he set forth in a certificate of trust by §3804(a) of this 'Fide."
Section 14. Amend §3813(a)(2), Title 12 of the Delaware Code by adding after the word -consolidation-, the words "a certificate of correction, a corrected certificate, a certificate of termination or amendment or a restated certificate...
Section 15. Amend §3815. 'Fide 12 of the Delaware Code by adding a new subsection (h) thereto to read as follows:
"(1) A governing instrument or an agreement of merger or consolidation may provide that contractual appraisal rights with respect to a beneficial interest or another interest in a business trust shall be available for any class or group of beneficial owners or beneficial interests in connection with any amendment of a governing instrument, any merger or consolidation in which the business trust is a constituent party to the merger or consolidation, or the sale of all or substantially all of the business trust's assets. The Court of Chancery shall have jurisdiction to hear and determine any matter relating to any such appraisal rights."
Section 16. Amend §§3818, 3819 and 3820, Title 12 of the Delaware Code by redesignating said sections as §§3820, 3821 and 3822 and by adding new §§3818 and 3819 to read as follows:
"§3818. Treasury Interests.
Except to the extent otherwise provided in the governing instrument of a business trust, a business trust may acquire, by purchase, redemption, or otherwise, any beneficial interest in the business trust held by a beneficial owner of the business trust. Except to the extent otherwise provided in the governing instrument of a business trust, any such interest so acquired by a business trust shall be deemed canceled.
§3819. Access to and Confidentiality of Information; Records.
(a) Except to the extent otherwise provided in the governing instrument of a business trust, each beneficial owner of a business trust has the right, subject to such reasonable standards (including standards governing what information and documents are to be furnished at what time and location and at whose expense) as may be established by the trustees, to obtain from the business trust from time to time upon reasonable demand for any purpose reasonably related to the beneficial owner's interest as a beneficial owner of the business trust:
(1) A copy of the governing instrument and certificate of trust and all amendments thereto, together with copies of any written powers of attorney pursuant to which the governing instrument and any certificate and any amendments thereto have been executed;
(2) A current list of the name and last known business, residence or mailing address of each beneficial owner and trustee;
(3) Information regarding the business and financial condition of the business trust; and
(4) Other information regarding the affairs of the business trust as is just and reasonable.
(b) Except to the extent otherwise provided in the governing instrument of a business trust, each trustee shall have the right to examine all the information described in subsection (a) of this section for any purpose reasonably related to his position as a trustee.
(c) Except to the extent otherwise provided in the governing instrument of a business trust, the trustees of a business trust shall have the right to keep confidential from the beneficial owners, for such period of time as the trustees deem reasonable, any information that the trustees reasonably believe to be in the nature of trade secrets or other information the disclosure of which the trustees in good faith believe is not in the best interest of the business trust or could damage the business trust or its business or which the business trust is required by law or by agreement with a third party to keep confidential.