N.Y. Transportation Law § 62: Remedies against the Utica transit authority

§ 62. Remedies against the Utica transit authority. 1. In an action

or proceeding to foreclose a mortgage on property of the Utica transit

authority, the authority and all other necessary parties, shall be made

parties defendant and shall take such steps in said action as may be

necessary to protect the public interest therein and no costs shall be

awarded against them. Wherever under the instrument creating a lien a

notice of default in writing is required to be served upon the Utica

transit authority before the institution of a foreclosure action or

proceeding, a copy of such notice shall be served upon the chairman of

the authority at least five days before the institution of such

proceedings. At such a sale of the property of the mass transportation

authority pursuant to foreclosure or other proceedings, the municipality

or municipalities within whose territorial jurisdiction the property

exists may purchase the property affected; or such municipality or

municipalities may, prior to the institution of a foreclosure action or

proceeding, or during such action or proceeding make such payment or

take such other steps as may be necessary to cure any defaults that may

have occurred and such steps as may be necessary to protect the property

of the Utica transit authority and the public interest.

2. In the event that the Utica transit authority shall default in the

payment of principal of or interest on an issue of 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 the authority shall fail or refuse to comply with the provisions

of this article or shall default in an agreement with the holders of an

issue of bonds then outstanding, the holders of twenty-five per cent of

the aggregate principal amount of the bonds of the issue then

outstanding by instrument or instruments filed in the office of the

clerk of the county in which the principal office of the Utica transit

authority is situated and proved or acknowledged in the same manner as a

deed to be recorded, may appoint a trustee to represent the holders of

the bonds for the purposes herein provided. Such trustee may declare all

the bonds due and payable, but before declaring the principal of the

bonds due and payable, he shall first give thirty days' notice in

writing to the authority, and, if all defaults shall be made good, then

with the consent of the holders of twenty-five per cent of the aggregate

principal amount of the bonds then outstanding, he shall annul the

declaration and its consequences. He shall, in addition to any powers

granted by this section, have and possess all of the powers necessary or

appropriate for the exercise of functions specifically set forth herein

or incident to the general representation of bondholders in the

enforcement and protection of their rights.

3. In addition to any other rights and remedies, but subject to such

limitations as may be made by contract, any obligee, lessor or

mortgagee, or any trustee or agent designated in the bonds of the Utica

transit authority or appointed as provided in paragraph two of this

section, or under a resolution, mortgage or indenture executed by the

Utica transit authority as security for its bonds may:

(a) bring suit upon the bonds of the Utica transit authority;

(b) by suit, action or special proceeding at law or in equity enforce

all rights of the bondholders, including the right to require the Utica

transit authority to collect revenues, rates, fares, fees, rentals and

other charges adequate to carry out any agreement as to, or pledge of,

such revenues, rates, fares, fees, rentals and other charges, and to

require the authority to carry out any other agreement with the

bondholders and to perform its duties under this article;

(c) by suit, action or special proceeding at law or in equity compel

the authority to perform each and every term, provision and covenant

contained in any agreement of the authority with an obligee, trustee,

mortgagee or lessor and require the performance of any or all such

covenants and agreements of the Utica transit authority and of the

duties imposed upon such authority by this article;

(d) by action or suit, enjoin any acts or things which may be unlawful

or in violation of the rights of such obligee, trustee, mortgagee, or

lessor;

(e) by suit, action or proceeding in any court of competent

jurisdiction compel possession of any project or any part thereof to be

surrendered to such obligee, trustee, mortgagee, or lessor having the

right to such possession under any agreement with the authority;

(f) by suit, action or proceeding in any court of competent

jurisdiction obtain the appointment of a receiver of any municipal

project of the mass transportation authority or any part thereof and of

the rents and profits therefrom. If such receiver be appointed, he may

enter and take possession of such project or any part or parts thereof

and operate and maintain the same, and collect and receive all fees,

rates, fares, rents, revenues, or other charges thereafter arising

therefrom in the same manner as the Utica transit authority itself might

do, and shall keep such moneys in a separate account or accounts and

apply the same in accordance with the obligations of the authority as

the court shall direct;

(g) by action or suit require the Utica transit authority to account

as if it were the trustee of an express trust.

4. The supreme court of the state shall have jurisdiction of a suit,

action or proceeding by a trustee on behalf of the bondholders. The

venue of the suit, action or proceeding shall be laid in the county in

which the principal office of the Utica transit authority is situated.

5. In a suit, action or proceeding by a trustee for the bond holders,

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 courts shall be a first charge on revenues,

rates, fares, fees, rentals and other charges derived from the municipal

project.