N.Y. Public Authorities Law § 1500-p: Remedies of bondholders

§ 1500-p. Remedies of bondholders. 1. In the event that the authority

shall default in the payment of principal of or interest on any issue of

the 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 the bonds, the holders

of twenty-five per centum in aggregate principal amount of the bonds of

such issue then outstanding, by instrument or instruments filed in the

office of the clerk of the county of Erie and proved or acknowledged in

the same manner as a deed to be recorded, may appoint a trustee to

represent the holders of such 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 bonds then

outstanding shall, in such trustee's own name:

(a) by action or special proceeding enforce all rights of the

bondholders, including the right to require the authority to collect

revenues adequate to carry out by any agreement as to, or pledge of,

such revenues, and to require the authority to carry out any other

agreements with the holders of such bonds and to perform its duties

under this title;

(b) bring suit upon such bonds;

(c) by action or special proceeding, require the authority to account

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

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

bonds;

(e) declare all such 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 bonds then outstanding, to annul

such declaration and its consequences.

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

proceeding by the trustee on behalf of bondholders. The venue of any

such suit, action or proceeding shall be laid in the county of Erie.

4. Before declaring the principal of all such bonds due and payable,

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

authority.

5. Any such trustee, whether or not the issue of bonds represented by

such trustee has been declared due and payable, shall be entitled as of

right to the appointment of a receiver of any part or parts of the

covered project the revenues of which are pledged for the security of

the bonds of such issue, and such receiver may enter and take possession

of such part or parts of the covered project and, subject to any pledge

or agreement with bondholders, shall take possession of all moneys and

other property derived from or applicable to the acquisition,

construction, operation, maintenance and reconstruction of such part or

parts of the covered project and proceed with the acquisition of any

necessary real property in connection with the covered project that the

authority has covenanted to construct, and with any construction which

the authority is under obligation to do and to operate, maintain and

reconstruct such part or parts of the covered project and collect and

receive all revenues thereafter arising therefrom subject to any pledge

thereof or agreement with bondholders relating thereto and perform the

public duties and carry out the agreements and obligations of the

authority under the direction of the court. In any suit, action or

proceeding by the trustee, the fee, counsel fees and expenses of the

trustee and of the receiver, if any, shall constitute taxable

disbursements and all costs and disbursements allowed by the court shall

be a first charge on any revenues derived from such project.

6. 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 in the enforcement and protection of their

rights.