Code of Alabama - Title 11: Counties and Municipal Corporations - Section 11-58-8 - Bonds - Security for payment of principal and interest; remedies upon default

Section 11-58-8 - Bonds - Security for payment of principal and interest; remedies upon default.

The principal of and interest on any bonds issued by a corporation organized under the authority of this chapter shall be secured by a pledge of the rentals and other receipts of all or any part of the medical clinic and its facilities financed in whole or in part with the proceeds of such bond issue or with the proceeds of bonds refunded or to be refunded by such issue, may be secured by a mortgage covering all or any part of the clinic from which the revenues so pledged may be derived and may be secured by a pledge of the lease of such clinic.

The proceedings under which such bonds are authorized to be issued or any such mortgage may contain any agreements and provisions customarily contained in instruments securing bonds, including, without limiting the generality of the foregoing, provisions respecting the fixing and collection of rents for any clinic or clinical facilities covered by such proceedings or mortgage, the terms to be incorporated in the lease of such clinic or facilities, the creation and maintenance of special funds from the revenues from such clinic or facilities and the rights and remedies available in event of default to the bondholders or to the trustee under a mortgage as the board of directors shall deem advisable and as shall not be in conflict with the provisions of this chapter; provided, however, that in making any such agreements or provisions a corporation organized under this chapter shall not have the power to obligate itself except with respect to the medical clinic and the application of the revenues therefrom.

The proceedings authorizing any bonds under this chapter and any mortgage securing such bonds may provide that, in the event of default in payment of the principal of or the interest on such bonds or in the performance of any agreement contained in such proceedings or mortgage, such payment and performance may be enforced by mandamus or by the appointment of a receiver with power to charge and collect rents and to apply the revenues from the project in accordance with such proceedings or the provisions of such mortgage. Any such mortgage may provide also that, in the event of default in such payment or the violation of any agreement contained in the mortgage, the mortgage may be foreclosed either by sale at public outcry or by civil action and may provide that any trustee under such mortgage or the holder of any of the bonds secured thereby may become the purchaser at any foreclosure sale if the highest bidder therefor.

(Acts 1955, No. 516, p. 1160, §6.)

Last modified: May 3, 2021