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Court of Chancery Finds That, Under New York Law, Notes May Be Voluntarily Cancelled Absent Provision in the Indenture to the Contrary

In Concord Real Estate CDO 2006-1, Ltd. v. Bank of America N.A., C.A. No. 5219-VCL (Del. Ch. May 14, 2010), read opinion here, the Court of Chancery addressed the issue of whether notes issued as part of a collateralized debt obligation were discharged when the holder surrendered them voluntarily to the obligors with the intent that the notes be canceled. On cross motions for summary judgment by the issuers and the trustee of the indenture, the Court of Chancery construed the plain language of an indenture under applicable New York contract law and held that notes issued pursuant to the indenture could be voluntarily cancelled.

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