N.Y. Public Authorities Law § 2543: Remedies of noteholders and bondholders

§ 2543. Remedies of noteholders and bondholders. 1. In the event that

the corporation shall default in the payment of principal of or interest

on or sinking fund payment on any issue of notes or bonds after the same

shall become due, whether at maturity or upon call from redemption, or

in the event that the corporation 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 the county of New York 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 corporation to carry out

any agreement with such holders and to perform its duties under this

title;

(b) bring suit upon such notes or bonds;

(c) by action or suit, require the corporation 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 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 such noteholders or bondholders.

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

county of New York.

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

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

corporation, the mayor and to the attorney general of the state.