N.Y. Public Authorities Law § 3017: Remedies of noteholders and bondholders

§ 3017. Remedies of noteholders and bondholders. 1. In the event that

a 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 otherwise or in the event

that a 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 in which the principal office of such corporation 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 notes

or bonds for the purposes herein provided.

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

twenty-five percentum 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

act;

(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 noteholder or bondholder trustee on behalf of such

noteholders or bondholders. The venue of any such suit, action or

proceeding shall be laid in the county in which the principal office of

the corporation is located.

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

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

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