_Debenture Scrip._--Debentures and debenture stock are usually made payable in instalments, for example 10% on application, 10% on allotment and the remainder at intervals of a few months. Until these payments are complete the securities are not issued, but to enable the subscriber to deal with his security pending completion the company issues to him an interim scrip certificate acknowledging his title and exchangeable on payment of the remaining instalments for debentures or debenture stock certificates. If a subscriber for debentures made default in payment the company could not compel him specifically to perform his contract, the theory of law being that the company could get the loan elsewhere, but this inconvenience is now removed (see § 105 of the Companies Act 1908).
_Remedies._--When debenture-holders' security becomes enforceable there are a variety of remedies open to them. These fall into two classes--(1) remedies available without the aid of the court; (2) remedies available only with the aid of the court.
1. If there is a trust deed, the trustees may appoint a receiver of the property comprised in the security, and they may also sell under the powers contained in the deed, or under § 25 of the Conveyancing Act 1881. Sometimes, where there is no trust deed, similar powers--to appoint a receiver and to sell--are inserted in the conditions indorsed on the debentures.
2. The remedies with the aid of the court are--(a) an action by one or more debenture-holders on behalf of all for a receiver and to realize the security; (b) an originating summons for sale or other relief, under Rules of Supreme Court, 1883, O. lv. r. 5A; (c) an action for foreclosure where the security is deficient (all the debenture-holders must be parties to this proceeding); (d) a winding-up petition. Of these modes of proceeding, the first is by far the most common and most convenient. Immediately on the issue of the writ in the action the plaintiff applies for the appointment of a receiver to protect the security, or if the security comprises a going business, a receiver _and manager_. In due course the action comes on for judgment, usually on agreed minutes, when the court directs accounts and inquiries as to who are the holders of the debentures, what is due to them, what property is comprised in the security, and gives leave to any of the parties to apply in chambers for a sale. If the company has gone into liquidation, leave must be obtained to commence or continue the action, but such leave in the case of debenture-holders is _ex debito justitiae_. A debenture-holder action when the company is in winding up is always now transferred to the judge having the control of the winding-up proceedings. The administration of a company's assets in such actions by debenture-holders (debenture-holders' liquidations, as they are called) has of late encroached very much on the ordinary administration of winding up, and it cannot be denied that great hardship is often inflicted by the floating security on the company's unsecured creditors, who find that everything belonging to the company, uncalled capital included, has been pledged to the debenture-holders. The conventional answer is that such creditors might and ought to have inspected the company's register of mortgages and charges. The matter was fully considered by the departmental board of trade committee which reported in July 1906, but the committee, looking at the business convenience of the floating charge, saw no reason for recommending an alteration in the law.