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Preston Hollow Capital v. Truist Bank
Analysis
Bond Indenture Trustee Owes Contractual, Not Statutory Trust Code, Duties When Legal Title Does Not Transfer
In *Preston Hollow Capital v. Truist Bank*, the Texas Business Court held that bond indenture documents did not create an express trust subject to the Trust Code because they failed to transfer complete legal title to the trustee, a prerequisite under Texas law. The court ruled that the bond trustee's duties were instead contractually defined by the indenture terms, not by statutory fiduciary obligations.
Punitive Damages Waivers Enforceable in Bond Trustee Disputes; Terminated Trustees Retain Confidentiality Duties
In Preston Hollow Capital v. Truist Bank, the Texas Business Court held that the Trust Code does not bar enforcement of contractual punitive damages waivers in bond financing arrangements and that such waivers extend to related contracts within the same financing structure. The court further ruled that a trustee who resigns and is replaced must continue to protect confidential information obtained during the trust relationship, limiting discovery on post-termination breach claims.