58:14-34.18. Remedies of bond holders
(a) The provisions of this section shall be applicable to a series of bonds authorized or issued under this act only if the bond resolution of the commissioners authorizing or providing for the issuance of such bonds, or an amendment thereof, shall provide in substance that the holders of the bonds of such series shall be entitled to the benefits, and be subject to the provisions of this section. (b) In the event that there shall be a default in the payment of principal of or interest on any bonds of such series 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 commissioners shall fail or refuse to comply with the provisions of this act or shall fail or refuse to carry out and perform the terms of any contract with the holders of any of such bonds, and such failure or refusal shall continue for a period of ninety days after written notice to the commissioners of its existence and nature, the holders of twenty-five per centum (25%) in aggregate principal amount of the bonds of such series then outstanding by instrument or instruments filed in the office of the Secretary of State 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 of such series for the purposes provided in this section. (c) Such trustee may and upon written request of the holders of twenty-five per centum (25%) in aggregate principal amount of the bonds of such series then outstanding shall, in his or its own name: (1) By action, suit or proceeding in the nature of mandamus, injunction, certiorari or otherwise, enforce all rights of the holders of such bonds, including the right to require the commissioners to charge and collect system revenues and other charges adequate to carry out any contract as to, or pledge of, such moneys, and to require the commissioners to carry out and perform the terms of any contract with the holders of such bonds or its duties under this act; (2) Bring action upon all or any part of such bonds or interest coupons or claims appurtenant thereto; (3) By action, suit or other proceeding, as if in equity, require the commissioners to account as if it were the trustee of an express trust for the holders of such bonds; (4) By action, suit or other proceeding, as if in equity, enjoin any acts or things which may be unlawful or in violation of the rights of the holders of such bonds. (d) Such trustee shall, in addition to the foregoing, have and possess all of the powers necessary or appropriate for the exercise of the functions specifically set forth herein or incident to the general representation of the holders of bonds of such series in the enforcement and protection of their rights. (e) In any action, suit or other proceeding by such trustee, the fees, counsel fees and expenses of the trustee shall constitute taxable costs and disbursements, and all costs and disbursements, allowed by the court, shall be a first charge upon any system revenues of the commissioners pledged for the payment or security of bonds of such series. L.1953, c. 388, p. 2016, s. 9.
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Last modified: October 11, 2016