N.Y. Public Authorities Law § 1339: Remedies of noteholders and bondholders

§ 1339. Remedies of noteholders and bondholders. 1. In the event that

the authority 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 authority 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 any county

in which the authority operates and has an office 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 authority to collect

fares, tolls, rentals, rates, charges and other fees adequate to carry

out any agreement as to, or pledge of, such fares, tolls, rentals,

rates, charges and other fees and to require the authority 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 authority 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

proceedings 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 in which the instrument or instruments are filed in accordance

with subdivision one of this section.

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 authority, to the comptroller and to the attorney

general of the state.