§ 15 — Remedies of noteholders and bondholders

§ 15. Remedies of noteholders and bondholders. 1. In the event that\nthe agency shall default in the payment of principal of or interest on\nany issue of notes or bonds after the same shall become due, whether at\nmaturity or upon call for redemption, and such default shall continue\nfor a period of thirty days, or in the event that the agency shall fail\nor refuse to comply with the provisions of this act, or shall default in\nany agreement made with the holders of any issue of notes or bonds, the\nholders of twenty-five per centum in aggregate principal amount of the\nnotes or bonds of such issue then outstanding, by instrument or\ninstruments filed in the office of the clerk of the county of Albany and\napproved or acknowledged in the same manner as a deed to be recorded,\nmay appoint a trustee to represent the holders of such notes or bonds\nfor the purposes herein provided.\n 2. Such trustee may, and upon written request of the holders of\ntwenty-five per centum in principal amount of such notes or bonds then\noutstanding shall, in his or its own name:\n (a) by suit, action or proceeding in accordance with the civil\npractice law and rules, enforce all rights of the noteholders or\nbondholders, including the right to require the agency to collect fees\nand charges and interest and amortization payments on mortgage and\nproject loans made by it adequate to carry out any agreement as to, or\npledge of, such fees and charges and interest and amortization payments\non such mortgages, project loans and other properties and to require the\nagency to carry out any other agreements with the holders of such notes\nor bonds and to perform its duties under this act;\n (b) bring suit upon such notes or bonds;\n (c) by action or suit, require the agency to account as if it were the\ntrustee of an express trust for the holders of such notes or bonds;\n (d) by action or suit, enjoin any acts or things which may be unlawful\nor in violation of the rights of the holders of such notes or bonds;\n (e) declare all such notes or bonds due and payable, and if all\ndefaults shall be made good, then, with the consent of the holders of\ntwenty-five per centum of the principal amount of such notes or bonds\nthen outstanding, to annul such declaration and its consequences.\n 3. Such trustee shall in addition to the foregoing have and possess\nall of the powers necessary or appropriate for the exercise of any\nfunctions specifically set forth herein or incident to the general\nrepresentation of bondholders or noteholders in the enforcement and\nprotection of their rights.\n 4. The supreme court shall have jurisdiction of any suit, action or\nproceeding by the trustee on behalf of such noteholders or bondholders.\nThe venue of any such suit, action or proceeding shall be laid in the\ncounty of Albany.\n 5. Before declaring due and payable the principal of notes or bonds\nissued in connection with any mortgage or other obligations securing a\nmortgage loan made by the agency, the trustee shall first give thirty\ndays' notice in writing to the governor, to the agency, to the state\ncommissioner of health and to the attorney general of the state.\n