N.Y. Public Authorities Law § 537: Remedies of bondholders

§ 537. Remedies of bondholders. 1. In the event that the authority

shall default in the payment of principal of or interest on any of the

bonds as 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 the bonds, the holders of twenty-five per centum in

aggregate principal amount of the bonds then outstanding, by instrument

or instruments filed in the office of the clerk of the county of

Dutchess, Ulster, Greene or Columbia and proved or acknowledged in the

same manner as a deed to be recorded, may appoint a trustee, to

represent the bondholders 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 the bonds then outstanding

shall, in his or its own name

(a) By suit, action or special proceeding, enforce all rights of the

bondholders, including the right to require the authority and the board

to collect tolls and rentals adequate to carry out any agreement as to,

or pledge of, such tolls and rentals, and to require the authority and

the board to carry out any other agreement with the bondholders and to

perform its and their duties under this title;

(b) Bring suit upon the 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 bondholders;

(d) By action or suit in equity, enjoin any acts or things which may

be unlawful or in violation of the rights of the bondholders;

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

been made good, then upon written request of twenty-five per centum in

principal amount of the bonds then outstanding, shall 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 the bondholders. The venue of any

such suit, action or proceeding shall be laid in Dutchess, Ulster,

Greene or Columbia county.

4. Before declaring the principal of all bonds due and payable the

trustee shall first give notice in writing to the authority and to the

attorney-general of the state of New York and if, when such notice is

given to the attorney-general the legislature shall be in session, the

trustee shall not declare the principal of the bonds due before the

legislature adjourns sine die, or if the legislature be not then in

session the trustee shall not declare the principal of the bonds due

until such an adjournment of the next regular session. If at such

session the legislature shall take any action as a result of which past

due principal and interest with interest on past due interest, together

with the fees, counsel fees and expenses of the trustee and of the

receiver, if any, as fixed by the court, shall be paid within sixty days

of its adjournment, default in the payment thereof shall thereby be

cured.

5. Any such trustee shall, whether or not all bonds have been declared

due and payable, be entitled as of right to the appointment of a

receiver who may enter and take possession of the bridges or any part or

parts thereof and operate and maintain the same and collect and receive

all tolls, rentals and other revenues thereafter arising therefrom in

the same manner as the authority itself might do and shall deposit all

such moneys in a separate account and apply the same in such manner as

the court shall direct. In any suit, action or proceedings 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 the bridges.

6. 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 the bondholders in the enforcement and protection of

their rights.

7. Whenever the word "bonds" or the word "bondholders" shall have been

used in this section five hundred and thirty-seven said word shall be

deemed to apply only to the bonds or the holders of the bonds of the

particular series affected by the default or failure, and the remedies

conferred by this section shall be available only to the holders of the

bonds of the series, and shall apply only to the bridge or bridges

affected by such default or failure.