N.Y. Public Authorities Law § 3243: Remedies of bondholders and noteholders

§ 3243. Remedies of bondholders and noteholders. 1. Subject to the

provisions of section three thousand two hundred thirty-six of this

title, 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

bonds or notes after the same shall become due, whether at maturity or

upon call for redemption, or in the event that the corporation or the

state shall default in any agreement made with the holders of any issue

of bonds or notes, the holders of twenty-five per centum 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 Albany 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 purposes herein provided.

2. Such trustee, or any trustee appointed under section three thousand

two hundred thirty-six of this title, may, and upon written request of

the holders of twenty-five per centum in principal amount of such bonds

or notes 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 bondholders or

noteholders, 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 bonds and notes;

(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 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; and

(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 of the principal amount of such bonds or notes

then outstanding annul such declaration and its consequences provided,

however, that nothing herein shall preclude the corporation from

agreeing that consent of the provider of a bond or note facility is

required for an acceleration of related bonds or notes in the event of a

default other than a failure to pay principal of or interest on the

bonds or notes when due.

3. 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 Albany.

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

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

corporation, the governor, the comptroller, the temporary president of

the senate, the speaker of the assembly and to the attorney general of

the state.