N.Y. Public Authorities Law § 368: Remedies of noteholders and bondholders

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

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

on any issue of notes or 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 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 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 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 mandamus or other suit, action or proceeding at law or in

equity enforce all rights of the noteholders or bondholders, including

the right to require the authority to collect fees, rentals and charges

adequate to carry out any agreements with the holders of such notes or

bonds and to perform its duties under this title;

(b) bring suit upon such notes or bonds;

(c) by action or suit in equity, require the authority 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 in equity, 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, to annul such declaration and its consequences;

provided, however, that this clause (e) shall not be applicable in the

case of notes or bonds guaranteed by the state.

3. Such trustee, whether or not the issue of bonds or notes

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 thruway, the fees, rentals, charges or other 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 thruway and, subject to any pledge or agreement with bondholders,

shall take possession of all moneys and other property derived from or

applicable to the construction, operation, maintenance and

reconstruction of such part or parts of the thruway and proceed with any

construction thereon which the authority is under obligation to do and

shall operate, maintain and reconstruct such part or parts of the

thruway, and collect and receive all fees, rentals, charges and other

revenues thereafter arising therefrom subject to any pledge thereof or

agreement with bondholders or noteholders 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 tolls, rentals and other revenues derived from

such part or parts of the thruway.

4. 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.

5. 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 Albany.

6. Before declaring the principal of notes or bonds not guaranteed by

the state due and payable, the trustee shall first give thirty days'

notice in writing to the authority.