N.Y. Private Housing Finance Law § 50: Remedies of noteholders and bondholders

§ 50. Remedies of noteholders and bondholders. 1. In the event that

the agency shall default in the payment of principal of or interest on

any issue of notes or bonds after the same shall become due, whether at

maturity or upon call for redemption, and such default shall continue

for a period of thirty days, or in the event that the agency shall fail

or refuse to comply with the provisions of this article, or shall

default in any agreement made with the holders of any issue of notes or

bonds, the holders of twenty-five per centum in aggregate principal

amount of the notes or bonds of such issue then outstanding, by

instrument or instruments filed in the office of the clerk of the county

of Albany and approved or acknowledged in the same manner as a deed to

be recorded, may appoint a trustee to represent the holders of such

notes or bonds for the purposes herein provided.

2. Such trustee may, and upon written request of the holders of

twenty-five per centum in principal amount of such notes or bonds then

outstanding shall, in his or its own name:

(a) by action or special proceeding in accordance with the civil

practice law and rules, enforce all rights of the noteholders or

bondholders, including the right to require the agency to collect fees

and charges and interest and amortization payments on mortgage loans

made by it adequate to carry out any agreement as to, or pledge of, such

fees and charges and interest and amortization payments on such

mortgages, and other properties and to require the agency to carry out

any other agreements with the holders of such notes or bonds and to

perform its duties under this title;

(b) bring suit upon such notes or bonds;

(c) by action or special proceeding require the agency to account as

if it were the trustee of an express trust for the holders of such notes

or bonds;

(d) by action or special proceeding enjoin any acts or things which

may be unlawful or in violation of the rights of the holders of such

notes or bonds;

(e) declare all such notes or bonds due and payable, and if all

defaults shall be made good, then, with the consent of the holders of

twenty-five per centum of the principal amount of such notes or bonds

then outstanding, to annul such declaration and its consequences.

3. Such trustee shall in addition to the foregoing have and possess

all of the powers necessary or appropriate for the exercise of any

functions specifically set forth herein or incident to the general

representation of bondholders or noteholders in the enforcement and

protection of their rights.

4. The supreme court shall have jurisdiction of any suit, action or

proceeding by the trustee on behalf of such noteholders or bondholders.

The venue of any such suit, action or proceeding shall be laid in the

county of Albany.

5. Before declaring due and payable the principal of notes or bonds

issued in connection with any mortgage or other obligation securing a

mortgage loan made by the agency, the trustee shall first give thirty

days' notice in writing to the governor, to the agency, to the

commissioner of housing and community renewal, the state commissioner of

health, the state commissioner of mental hygiene or the state

commissioner of social services, as the case may be, and to the attorney

general of the state.