N.Y. Public Authorities Law § 2046-h: Remedies of bondholders and noteholders

§ 2046-h. Remedies of bondholders and noteholders. Subject to

resolutions adopted pursuant to paragraph (j) of subdivision three of

section two thousand forty-six-g of this title:

1. In the event that the agency shall default in the payment of

principal of or interest on any issue of bonds or notes 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 agency 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 bonds or notes, the holders of twenty-five per cent in

aggregate principal amount of the bonds or notes, of such issue then

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

clerk of the county of Suffolk 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 or notes for the purpose herein provided.

2. Such trustee may, and upon written request of the holders of

twenty-five per centum in aggregate principal amount of such bonds or

notes 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 bondholders or

noteholders, including the right to require the agency to collect

rentals, rates, fees and charges adequate to carry out any agreement as

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

require the agency to carry out any other agreements with the holders of

such bonds or notes to perform its duties under this title;

(b) bring suit upon such bonds or notes;

(c) by action or suit, require the agency to account as if it were the

trustee of an express trust for the holders of such bonds or notes;

(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 bonds or notes;

(e) declare all such bonds or notes due and payable, and if all

defaults shall be made good, then with the consent of the holders of

twenty-five per centum in aggregate principal amount of such bonds or

notes 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 bondholders or noteholders.

The venue of any such suit, action or proceeding shall be laid in the

county of Suffolk.

5. Before declaring the principal of bonds or notes due and payable,

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

governing body and president of the agency.

6. 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 or notes 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 holders of bonds or notes 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

agency 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 bond or note holders relating thereto and perform the

public duties and carry out the agreements and obligations of the agency

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.