N.Y. Private Housing Finance Law § 123: Dissolution

§ 123. Dissolution. 1. After termination of any tax exemption granted

pursuant to section one hundred twenty-five of this article, whether by

expiration or by any other cause, or in the event that prior thereto the

redevelopment company elects to pay to the municipality the total of all

accrued taxes for which such exemption was granted and received,

together with interest at the rate of five per centum per annum, a

redevelopment company which is a corporation or partnership or limited

liability company may voluntarily dissolve or, in the case of a

redevelopment company which is a trust, may terminate, and title to the

project may be conveyed in fee to the owner or owners of its capital or

to any corporation, partnership, limited liability company or trust

designated by it or them for the purpose, or the redevelopment company

may be dissolved or terminated and reconstituted pursuant to appropriate

laws relating to the formation and conduct of corporations,

partnerships, limited liability companies or trusts, after providing, in

any case, for the payment of all current operating expenses, taxes,

indebtedness and all accrued interest thereon, and the par value or

amount of the capital of the redevelopment company and accrued

distributions in respect thereof. If, after making such provision and

after the conveyance of the project, a cash surplus remains in the

treasury of the redevelopment company, such cash surplus shall, upon

dissolution or termination, be paid into the general fund of the

municipality. After such dissolution or termination and conveyance or

such reconstitution, the provisions of this article shall become and be

inapplicable to any such project and its owner or owners, and any tax

exemption granted to such redevelopment company pursuant to section one

hundred twenty-five of this article shall cease and terminate.

2. If prior to the termination of any tax exemption the project is

sold for any reason, the redevelopment company shall dissolve or

terminate, and any tax exemption granted to such redevelopment company

pursuant to section one hundred twenty-five of this article shall cease

and terminate, except as otherwise provided in section one hundred

twenty-two of this article. In such case the shareholders, partners,

members or beneficiaries, as the case may be, and income debenture

certificate holders shall in no event receive more than the par value of

their shares or amount of their capital and the face value of their

income debenture certificates with accrued and unpaid distributions or

interest in respect of such capital and income debenture certificates,

and any remaining surplus shall be paid into the general fund of the

municipality.

3. In no event shall a redevelopment company be voluntarily dissolved

or terminated unless provision is made for the payment in full of the

remaining balance of principal and interest due or unpaid upon any

mortgage on its property or any part thereof, but any project may, with

the consent of the local legislative body of the municipality, be

conveyed and transferred to the municipality subject to such mortgage

and accrued interest.

4. Unless the local legislative body of the municipality shall consent

to the voluntary dissolution or termination of a redevelopment company,

such a company shall not dissolve or terminate except in accordance with

subdivisions one and two of this section or upon the expiration of its

term as stated in the certificate creating the redevelopment company.

5. With the consent of the local legislative body and the

superintendent of financial services, a redevelopment company heretofore

or hereafter organized may voluntarily dissolve or terminate prior to

the termination of any tax exemption granted pursuant to section one

hundred twenty-five of this article and title to the project may be

conveyed, and all other assets of such redevelopment company may be

transferred, to an insurance company, whether or not such project shall

have been theretofore completed. After such dissolution or termination

and conveyance such tax exemption shall continue for the period of years

originally provided for in the contract, or for the unexpired portion

thereof if such period shall have theretofore commenced, subject to

prior termination pursuant to section one hundred twenty-four or section

one hundred twenty-five of this article, and the provisions of this

article shall thereafter be applicable to such project and to such

insurance company to the same extent and with the same force and effect

as though such project had been initially undertaken by such insurance

company pursuant to section one hundred twenty-four of this article;

provided, however, that nothing herein contained shall be deemed to

require the resubmission of the plan of the project and the contract

relating thereto for approval pursuant to section one hundred fourteen

of this article.

6. The contract with the municipality may contain such other

provisions for the dissolution or termination of the redevelopment

company as may be deemed advisable, not inconsistent with the provisions

of this article. In case of a dissolution or termination and conveyance

in accordance with subdivision five of this section, the contract may be

modified consistently with the provisions of said subdivision five and

section one hundred twenty-four of this article, any such modifications

to be approved by the superintendent of financial services and the local

legislative body.

7. Upon dissolution or termination as provided in this section, this

article shall become and be inapplicable to the project and its owner or

owners except as otherwise contemplated by subdivision five of this

section.