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Disqualification of Debenture Trustee
Corporate & Other Laws
A person who is proposed to be the Debenture Trustee cannot have furnished a guarantee in respect of a principal debt secured by the Debenture or interest thereon What does principal debt mean in this context?
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Best Answer
Principal debt is the amount raised by issue of debentures by the company. Its a loan from debenture holders for which guarantee should not be given by debenture trustee. This ensures that the trustee remains impartial and has no conflicting obligations regarding the debt.
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