N.Y. Local Finance Law § 85.30: Petition of municipality; temporary stay of claims

§ 85.30 Petition of municipality; temporary stay of claims. A

voluntary petition may be filed pursuant to this section by any

municipality or, in the event a municipality refuses to file such

petition after request by its emergency financial control board, or

fails to do so within five days thereafter, the board may file a

petition pursuant to this section on behalf of the municipality. The

petition shall be filed in the supreme court in a county in which the

municipality is located. The petition shall state: (a) that the

municipality is unable to pay its debts or obligations as they mature;

(b) that the municipality or its emergency financial control board

intends to file with the court a repayment plan in compliance with the

requirements of section 85.40 of this title; (c) the nature of the debts

and obligations of the municipality which may be affected by the plan

and the approximate amount thereof; and (d) the identities and addresses

of creditors who may be affected by the plan or, in lieu thereof, the

reason such identification is impracticable and a listing of creditors

in a manner that is practicable in the circumstances. A petition filed

pursuant to this section shall operate to prohibit the doing of any act,

and to stay the commencement or continuation of any action or special

proceeding in any court in any jurisdiction, seeking to apply or enforce

against the municipality or any covered organization, or their funds,

property, receivables or revenues, any order, judgment, lien, set-off or

counterclaim relating to any contract, debt or obligation, direct or

indirect, of the municipality, including but not limited to any bond,

note or other evidence of indebtedness, or seeking the assessment, levy

or collection of taxes by or for the municipality or the application of

any funds, property, receivables or revenues of the municipality or any

covered organization, for a period of ninety days; provided, however,

that: (i) the stay may be vacated prior thereto if, upon motion of any

creditor affected thereby, the court finds, after a hearing, that the

petition was not filed in good faith; (ii) if a repayment plan for the

municipality is filed within ninety days from the filing of the

petition, or within such additional period of time as the court may find

after a hearing is required to permit the preparation and filing of such

a plan, the court shall extend the stay for such additional period of

time as is required to permit the court to enter an order pursuant to

section 85.40 of this title; (iii) any applicable statute of limitations

shall be tolled during the period of any stay or extension thereof

pursuant to this title; and (iv) during the period of any stay or

extension thereof pursuant to this title, the municipality may expend

moneys to maintain and provide such services and for such purposes as

are determined to be necessary by its emergency financial control board.