N.Y. Public Authorities Law § 1294: Remedies of noteholders and bondholders

§ 1294. Remedies of noteholders and bondholders. 1. In the event that

the corporation shall default in the payment of principal of or interest

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

on any sinking fund payment date, at maturity or upon call for

redemption, and such default shall continue for a period of thirty days,

or in the event that the corporation shall fail or refuse to comply with

the provisions of this title 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 proved 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 suit, action or proceeding in accordance with the civil

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

bondholders, including the right to require the corporation to collect

rentals, rates, charges and other fees and to collect interest and

amortization payments on municipal bonds and notes and bonds and notes

of any state agency held by it adequate to carry out any agreement as

to, or pledge of, such rentals, rates, charges and other fees and of

such interest and amortization payments, and to require the corporation

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 suit, require the corporation to account as if it

were the trustee of an express trust for the holders of such notes or

bonds;

(d) by action or suit, 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 the principal of notes or bonds due and payable,

the trustee shall first give thirty days' notice in writing to the

governor, to the corporation, to the comptroller and to the attorney

general of the state.