N.Y. Public Authorities Law § 2668: Remedies of bondholders

§ 2668. Remedies of bondholders. Subject to any resolution or

resolutions adopted pursuant to this title:

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

principal of or interest on any issue of 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 bonds, the holders of twenty-five percent 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

in which the principal office of the authority is located 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 purpose herein

provided.

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

twenty-five per centum in principal amount of such bonds outstanding

shall, in its own name:

(a) By action or proceeding in accordance with the civil practice law

and rules, enforce all rights of the bondholders, including the right to

require the authority to collect rents, rates, fees and charges adequate

to carry out any agreement as to, or pledge of, such rents, rates, fees

and charges and to require the authority to carry out any other

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

this title;

(b) Bring an action or proceeding upon such bonds;

(c) By action or 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 proceeding, enjoin any acts or things which may be

unlawful or in violation of the rights of the holders of such bonds; and

(e) Declare all such bonds due and payable, and if all defaults shall

be made good, then with the consent of the holders of the twenty-five

per centum of the principal amount of such bonds 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 in the enforcement and protection of their

rights.

4. The supreme court shall have jurisdiction of any action or

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

any such action or proceeding shall be laid in the county.

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

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

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 any 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 such

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

with the holders of such bonds, shall take possession of all monies and

other property derived from such part or parts of the project and

proceed with any construction thereon or the acquisition of any

property, real or personal, in connection therewith that the authority

is under obligation to do, and to operate, maintain and reconstruct such

part or parts of the project and collect and receive all revenues

thereafter arising therefrom subject to any pledge 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.