§ 3-76q — Default by state, remedies of municipalities, holders.

Connecticut § 3-76q

• Jurisdiction: Connecticut
• Title 3: State Elective Officers
• Ch. 32: Treasurer

Text

(a) If the state defaults in the payment of principal or interest on any issue of special obligation bonds after they become due, whether at maturity or upon call for redemption, and the default continues for thirty days, or if the state fails or refuses to comply with this part or defaults in any agreement made with a municipality or with the holders of any issue of bonds, and such failure or refusal continues thirty days after written notice thereof, the holders of twenty-five per centum in aggregate principal amount of the outstanding bonds of that issue, by instrument filed in the office of the Secretary of the State and executed in the same manner as a deed to be recorded, subject to the provisions of subsection (r) of section 3-76g, may appoint a trustee to represent the holders of those bonds for the purposes herein provided and the municipality may proceed by mandamus or other appropriate suit, action or proceeding at law or in equity to enforce its rights. (b) A trustee appointed under this section may, and shall in his or its name, upon written request of the holders of twenty-five per centum in principal amount of outstanding special obligation bonds: (1) By mandamus or other suit, action or proceeding at law or in equity, enforce all rights of bondholders, including the right to require the state to collect the trust receipts, and to collect interest and amortization payments on municipal refunding bonds held by it adequate to carry out any agreement as to, or pledge of, the trust receipts and of the interest and amortization payments, and to require the state to carry out any other agreements with the holders of such bonds and to perform its duties under this part; (2) bring suit upon all or any part of the bonds or interest coupons appertaining thereto; (3) by action or suit, require the state to account as if it were the trustee of any express trust for the holders of the bonds; (4) by action or suit in equity enjoin anything which may be unlawful or in violation of the rights of the holders of the bonds; (5) declare all the bonds due and payable, and if all defaults are made good, then with the consent of the holders of twenty-five per centum of the principal amount of the outstanding bonds, annul the declaration and its consequences; (6) the trustee shall in addition to the foregoing have all the powers necessary for the exercise of any functions specifically set forth herein or incident to the general representation of bondholders in the enforcement and protection of their rights. (c) Before declaring the principal of bonds due and payable, the trustee must first give thirty days' notice in writing to the Governor, the State Treasurer and the Attorney General of the state.

Legislative History

(P.A. 73-591, S. 17, 21; P.A. 10-32, S. 4.) History: P.A. 10-32 made a technical change in Subsec. (a), effective May 10, 2010.