N.Y. Real Property Law § 122-a: Modification of trust mortgages given in prior re-organizations

§ 122-a. Modification of trust mortgages given in prior

re-organizations. Any such banking corporation or any individual acting

as trustee in respect to any mortgage, deed of trust or indenture upon

real property, or any leasehold interest therein, against which bonds,

certificates, shares or any other evidence of interests therein (herein

called "debts") shall have been issued to the public, and which mortgage

shall have been given to such trustee by a corporation organized under

section one hundred twenty-one hereof, pursuant to a plan of

reorganization approved by the court and which became effective under

section one hundred twenty-two hereof, or which mortgage shall have been

given to or is held by such trustee pursuant to, or by reason of, a plan

of reorganization heretofore or hereafter approved and confirmed under

the bankruptcy acts of the United States or which mortgage shall have

been given to such trustee under a voluntary plan of reorganization by a

corporation caused to be organized by a bondholders' committee for the

purpose of acquiring the property secured by such mortgage, may, without

foreclosure of such mortgage, and whether or not a default exists

thereunder, present to the supreme court in the county where all or part

of the real property affected by such mortgage is situated, a plan for

the reorganization of such mortgage, deed of trust or indenture. The

plan of reorganization may provide for: (1) the extension of the

maturity of the mortgage, deed of trust or indenture and the debts

secured thereby; (2) the modification of the provisions for interest,

amortization or sinking funds; and (3) such other changes, modifications

or amendments as may be fair and feasible and for the best interests of

the security holders. Such plan may likewise be presented by holders or

representatives of twenty-five per centum in principal amount of such

securities. Such plan may cover one or more mortgages with respect to

said property. If no default shall exist in the payment of principal or

interest, such plan may be presented by the mortgagor or by the owner of

the property covered by such mortgage. Hearing upon such reorganization

plan shall be at such time and place and upon such notice by

publication, mailing or otherwise as the court shall fix in an order to

show cause why the plan should not be approved. No plan shall be

approved unless the court, after such hearing shall determine that it is

fair, feasible and for the best interests of the security holders. The

affirmative consent of the holders of two-thirds of the principal amount

of the outstanding securities shall constitute a presumption that the

plan is fair, feasible and for the best interests of the security

holders. All proceedings hereunder and the rights of the parties hereto,

including the hearing, the final order determining the plan of

reorganization embodying such modifications, the time and method for the

persons affected by such plan becoming parties thereto and the right of

appeal from any order, shall be governed by section one hundred

twenty-two hereof; except that if the reorganization shall become

effective it shall be without prejudice to the right of any particular

holder of such securities who has duly dissented therefrom to have the

court determine the cash value of such securities as he may have owned

on or before the date of the presentation of the plan of reorganization

pursuant to this section, and providing for the payment or securing his

ratable share of such amount as a condition for declaring the plan

effective. Upon the order becoming effective the plan shall be binding

upon all the security holders.

If any provision of this section or of section one hundred twenty-two

hereof or any clause, sentence, paragraph or any part of such section or

the application thereof to any person or circumstance shall be held

unconstitutional or invalid, such decision or judgment shall not affect

or impair the constitutionality or validity of the remainder thereof,

but shall be confined in its operation to the clause, sentence,

paragraph or part thereof directly involved in such decision or

judgment.