N.Y. Public Authorities Law § 162: Remedies of bondholders

* § 162. 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 such issue

then outstanding by instrument or instruments filed in the office of the

clerk of the county of Nassau or of Suffolk and proved or acknowledged

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

represent the bondholders 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 issue of bonds then

outstanding shall upon being furnished security satisfactory to the

trustee for the recovery of his or its expense and against loss and

liability in his or its own name

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

bondholders, including the right to require the authority and the board

to collect revenues adequate to carry out any agreement as to, or pledge

of, such revenues and to require the authority and the board to carry

out any other agreements with the bondholders and to perform its and

their duties under this title;

(b) bring suit upon the bonds;

(c) by action or suit in equity, require the authority to account as

if it were the trustee of an express trust for the bondholders;

(d) by action or suit in equity, enjoin any acts or things which may

be unlawful or in violation of the rights of the bondholders; (e)

declare all bonds of such issue 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 issue 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 the bondholders. The venue of any

such suit, action or proceeding shall be laid in Nassau county or

Suffolk county.

4. 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

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 said

part or parts of the 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 construction, operation, maintenance

and reconstruction of said part or parts of the project and proceed with

any construction thereon which the authority is under obligation to do

and to operate, maintain and reconstruct the said part or parts of the

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 fees,

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.

5. 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 the bondholders in the enforcement and protection of

their rights.

6. All bonds issued pursuant to the same resolution, although issued

at different times and with different terms and provisions and although

supplemental resolutions may be required prior to the issuance of part

of such bonds, shall constitute one issue for the purposes of this

section, but any resolution may provide that the bonds issued pursuant

thereto shall constitute one or more separate issues for the purposes of

this section.

* NB (Authority abolished June 30, 1978)