§ 40-61-16 — Remedies of bondholders

North Dakota § 40-61-16

• Jurisdiction: North Dakota
• Title 40: Municipal Government
• Ch. 40-61: Municipal Parking Authority Act

Text

1. In the event that an authority shall default in the payment of principal of or interest on
any issue of the 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 an authority shall fail or refuse to comply with the provisions of this chapter,
or shall default in any agreement made with the holders of any issue of the 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 recorder
of the county in which the authority is located, unless the board of county
commissioners designates a different official, 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 purposes herein provided.
2. Such trustee may, and upon written request of the holders of twenty-five percent in
principal amount of such bonds then outstanding shall, in the trustee's own name:
a. By action or special proceeding enforce all rights of the bondholders, including
the right to require an authority to collect revenues adequate to carry out by any
agreement as to, or pledge of, such revenues, and to require an authority to carry
out any other agreements with the holders of such bonds and to perform its
duties under this chapter.
b. Bring suit upon such bonds.
c. By action or suit in equity, require an authority to account as if it were the trustee
of an express trust for the holders of such bonds.
d. By action or suit in equity, enjoin any acts or things which may be unlawful or in
violation of the rights of the holders of such bonds.
e. Declare all such bonds due and payable, and if all defaults shall be made good
then with the consent of the holders of twenty-five percent of the principal amount
of such bonds then outstanding, to annul such declaration and its consequences.
3. The district court shall have jurisdiction of any suit, action, or proceeding by the trustee
on behalf of bondholders. The venue of any such suit, action, or proceeding shall be
laid in the county in which the authority is located.
4. Before declaring the principal of all such bonds due and payable, a trustee shall first
give thirty days' notice in writing to an authority.
5. 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 a
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
bondholders, shall take possession of all moneys and other property derived from or
applicable to the acquisition, construction, operation, maintenance, and reconstruction
of such part or parts of the project and proceed with the acquisition of any necessary
real property in connection with the project that an authority has covenanted to
construct and with any construction which an authority 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 thereof or
agreement with bondholders relating thereto and perform the public duties and carry
out the agreements and obligations of an authority under the direction of the court. In
any suit, action, or proceeding by the trustee, the fee, 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 such project.

6. 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 herein
or incident to the general representation of bondholders on the enforcement and
protection of their rights.