## Facts

- Affiliated Computer Services, Inc. (ACS) issued publicly traded senior notes under an indenture (and related supplemental indentures) with reporting obligations tied to ACS’s SEC filings.
- The indenture trustee was Wilmington Trust Company (Wilmington), sued solely in its capacity as trustee for the noteholders (Wilmington replaced the prior trustee).
- Under the Securities Exchange Act of 1934, ACS was required to file periodic reports with the SEC, including an annual report on Form 10‑K.
- The indenture required ACS to deliver to the trustee copies of the same SEC reports “within 15 days after” ACS filed them with the SEC.
- In 2006, ACS conducted an internal investigation into its stock-option practices and announced it would not timely file its annual report with the SEC by the applicable due date.
- ACS ultimately filed the delayed annual report with the SEC in January 2007 and then delivered a copy to Wilmington within the 15‑day period specified in the indenture.
- Cede & Co., acting for noteholders, sent notices asserting that ACS had defaulted under the indenture based on its failure to file the annual SEC report by the SEC deadline and demanded acceleration.
- ACS filed a federal declaratory-judgment action seeking a declaration that it was not in default and that acceleration was not permitted on the basis asserted.
- Wilmington counterclaimed, contending that ACS’s late SEC filing breached the indenture (and related theories) and constituted an Event of Default.
- ACS and Wilmington filed cross-motions for summary judgment focused on whether late SEC filing, by itself, triggered default under the indenture or under § 314(a) of the Trust Indenture Act of 1939 (TIA).

## Issues

1. Whether the indenture’s reporting covenant required ACS to file its SEC reports by the SEC’s deadlines, or instead only required ACS to provide the trustee copies within 15 days after ACS actually filed with the SEC.
2. Whether ACS’s late filing of its annual report with the SEC, standing alone, constituted an Event of Default under the indenture’s default provisions.
3. Whether TIA § 314(a) imposed a timing requirement (tied to SEC due dates) that could support a declaration of default even if the indenture text did not.
4. Whether Wilmington could rely on a good-faith theory to impose a timely-SEC-filing obligation not stated in the indenture.

## Decision

- The court granted ACS’s motion for summary judgment and denied Wilmington’s cross-motion.
- The court held that the indenture’s reporting covenant was triggered by ACS’s actual filing with the SEC and required delivery to the trustee within 15 days after that filing; it did not impose an independent duty to meet SEC filing deadlines.
- Because ACS delivered the report to Wilmington within 15 days after it filed with the SEC, ACS did not breach the reporting covenant.
- The court held that ACS’s late SEC filing did not, without express indenture language, constitute an Event of Default permitting acceleration.
- The court rejected Wilmington’s argument that TIA § 314(a) effectively imported SEC filing deadlines into the indenture as an enforceable default standard.
- The court declined to use a good-faith theory to add a timeliness requirement that the indenture did not contain.

## Legal Principles

- An indenture is interpreted according to its text; courts do not add default triggers that the agreement does not state.
- A covenant requiring delivery to a trustee “within [a stated number of] days after” filing with the SEC measures time from the issuer’s actual SEC filing date, not from the SEC’s regulatory due date.
- An Event of Default exists only if the issuer fails to comply with a defined covenant or other provision identified in the indenture; late SEC filing is not an Event of Default unless the indenture makes it one.
- TIA § 314(a) requires issuers to provide trustees with copies of Exchange Act reports, but it does not convert late SEC filing into a contractual Event of Default where the indenture does not do so.
- A good-faith theory cannot be used to create obligations that conflict with, or expand beyond, the parties’ written indenture terms.

## Conclusion

The court concluded that ACS was not in default because the indenture required ACS to deliver SEC-filed reports to the trustee within 15 days after filing with the SEC, and ACS satisfied that requirement despite filing late with the SEC; neither the TIA nor a good-faith theory supplied a separate timely-filing default not found in the indenture’s language.


Affiliated Computer Services v. Wilmington Trust Co., 2008 U.S. Dist. LEXIS 10190 (2008)