N.Y. Public Authorities Law § 567: Remedies of bondholders

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

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

the 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 the bonds the holders of

twenty-five per centum 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 of New York, or Queens or the Bronx or

Kings 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 purposes herein provided.

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

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

bonds and to perform its and their duties under this title;

(b) bring suit upon such 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

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 bonds;

(e) declare all such 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 bonds then outstanding, to 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 bondholders. The venue of any

such suit, action or proceeding shall be laid in the county of New York,

Queens, the Bronx, or Kings.

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

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

authority.

5. 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 a receiver of any part or parts of the

project the tolls or other 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 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

project and proceed with any construction thereon which 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 tolls and other

revenues thereafter arising therefrom subject to any pledge thereof 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 tolls, rentals and other revenues derived from such project.

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 bondholders in the enforcement and protection of their

rights.