N.Y. Public Authorities Law § 2031: Remedies of bondholders

§ 2031. 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 Onondaga 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 his or its own name

(a) by mandamus or other suit, action or proceeding at law or in

equity enforce all rights of the bondholders, including the right to

require the authority to collect revenues, rates, rentals, fees and

other charges adequate to carry out any agreement as to, or pledge of

such revenues, rates, rentals, fees and other charges 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 suit in equity, 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 suit in equity, 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.

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

properties 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 properties and subject to any pledge or

agreement with bonders shall take possession of all moneys and other

property derived from such part or parts of the properties and proceed

with any construction thereon or the acquisition of any property, real

or personal in connection therewith which the authority is under

obligation to do, and to operate, maintain and reconstruct such part or

parts of the properties 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 derived

from the properties.

6. Such trustees shall in addition to the foregoing have and possess

all of the powers necessary or appopriate 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.