§ 48:1096 — Remedies of bondholders

The rights and remedies herein conferred upon or granted to the bondholders, shall be in addition to and not in limitation of any rights and remedies lawfully granted to such bondholders by the resolution or resolutions providing for the issuance of bonds, or by any deed or trust, indenture or other agreement under which the same may be issued. In the event the authority shall default in the payment of principal or interest on any of the bonds after the said principal or interest 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 Part, or shall default in any agreement made with the holders of the bonds, the holders of twenty-five per centum in aggregate principal amount of the bonds 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 bondholders for the purpose herein provided.
Such trustee and any trustee under any deed of trust, indenture or other agreement, may, and upon written request of the holders of twenty-five percentum (or such other percentage or percentages as may be specified in any deed of trust, indenture, or other agreement aforesaid) in principal amount of the bonds then outstanding, shall, in his or its own name:
(1) by mandamus or other civil action or proceeding enforce all rights of the bondholders, including the right to require the authority to collect rates, rentals and other charges adequate to carry out any agreement as to or pledge of the revenues or receipts of the authority, and to require the authority to carry out any other agreements with or for the benefit of the bondholders, and to perform its duties under this Part,
(2) bring suit upon the bonds,
(3) require the authority to account as if it were the trustee of any express trust for the bondholders,
(4) enjoin any acts or things which may be unlawful or in violation of the rights of the bondholders.
Any trustee when appointed as aforesaid, or acting under a deed of trust, indenture or other agreement, shall be entitled as of right to the appointment of a receiver, who may enter and take possession of the facilities of the authority or any part or parts thereof, the revenues or receipts from which are or may be applicable to the payment of the bonds, and operate and maintain the same, and collect and receive all tolls, fares or other revenues thereafter arising therefrom in the same manner as the authority might do, and shall deposit all such moneys in a separate account and apply the same as the court shall direct. In any civil action or proceeding by the trustee, the fees, counsel fee, expenses of the trustee and of the receiver, if any, and all costs and disbursements allowed by the court shall be a first charge on any revenues and receipts derived from the facilities of the authority, the revenues or receipts from which are or may be applicable to the payment of the bonds. The 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 herein or incident to the general representation of the bondholders in the enforcement and protection of their rights.
Nothing in this Part shall authorize any receiver appointed pursuant to this Part for the purpose of operating and maintaining any facilities of the authority, to sell, assign, mortgage or otherwise dispose of any of the assets of whatever kind and character of the authority. It is the intention of this Part to limit the powers of such receiver to the operation and maintenance of the facilities of the authority as the court shall direct, and no holder of bonds of the authority or any trustee shall ever have the right in any civil action or proceeding to compel a receiver, nor shall any receiver ever be authorized or any court be empowered to direct the receiver to sell, assign, mortgage or otherwise dispose of any assets of the authority of whatever kind or character.

Legislative History

Acts 1958, No. 526, §6.