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New York Public Authorities - Title 6 - § 3634 Remedies of Bondholders

Legal Research Home > New York Laws > New York Public Authorities (PBA) > New York Public Authorities - Title 6 - § 3634 Remedies of Bondholders

 
    §  3634.  Remedies  of  bondholders.  Subject  to  any  resolution  or
  resolutions adopted pursuant to this title:
    1. In the event that the corporation shall default in the  payment  of
  principal  of  or  interest  on  any 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 that
  the  corporation  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  bonds,  the  holders of twenty-five percent 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
  in  which  the principal office of the corporation is located 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  purpose
  provided in this title.
    2.  Such  trustee  may,  and  upon  written  request of the holders of
  twenty-five  percent  in  aggregate  principal  amount  of  such   bonds
  outstanding shall, in its own name:
    (a)  by action or proceeding in accordance with the civil practice law
  and rules, enforce all rights of the bondholders, including the right to
  require the corporation to  collect  rents,  rates,  fees,  and  charges
  adequate  to  carry  out  any agreement as to, or pledge of, such rents,
  rates, fees, and charges and to require the corporation to carry out any
  other agreements with the holders of such bonds to  perform  its  duties
  under this title;
    (b) bring an action or proceeding upon such bonds;
    (c)  by action or proceeding, require the corporation to account as if
  it were the trustee of an express trust for the holders of such bonds;
    (d) by action or proceeding, enjoin any acts or things  which  may  be
  unlawful or in violation of the rights of the holders of such bonds; and
    (e)  declare all such bonds due and payable, and if all defaults shall
  be made good, then with the consent of the holders  of  the  twenty-five
  percent   of   the   aggregate  principal  amount  of  such  bonds  then
  outstanding, to annul such declaration and its consequences.
    3. 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  in  this  title  or  incident  to  the
  general  representation of bondholders in the enforcement and protection
  of such bondholders' rights.
    4. The  supreme  court  shall  have  jurisdiction  of  any  action  or
  proceeding  by  the  trustee on behalf of such bondholders. The venue of
  any such action or proceeding shall be laid in the county.
    5. Before declaring the  principal  of  bonds  due  and  payable,  the
  trustee  shall  first  give  thirty  days'  notice  in  writing  to  the
  corporation.
    6. 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 any receiver of any part or parts of the
  project, the 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 the holders of such bonds, shall take possession of all monies  and
  other  property  derived  from  such  part  or  parts of the project and
  proceed  with  any  construction  thereon  or  the  acquisition  of  any
  property, real or personal, in connection therewith that the corporation
  is  under  obligation  to  do, and to operate, maintain, and reconstruct
  such part or parts of the project and collect and receive  all  revenues
  thereafter  arising  therefrom,  subject to any pledge or agreement with

  bondholders relating thereto, and perform the public  duties  and  carry
  out  the  agreements  and  obligations  of  the  corporation  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
  revenues derived from the properties.

Last modified: February 17, 2012