§ 13 — Remedies of noteholders and bondholders

§ 13. Remedies of noteholders and bondholders.\n 1. In the event that the agency shall default in the payment of\nprincipal of or interest on any issue of notes or bonds after the same\nshall become due, whether at maturity or upon call for redemption, and\nsuch default shall continue for a period of thirty days, or in the event\nthat the agency shall fail or refuse to comply with the provisions of\nthis act, or shall default in any agreements made with the holders of\nany issue of notes or bonds, the holders of twenty-five per centum in\naggregate principal amount of the notes or bonds of such issue then\noutstanding, by instrument or instruments filed in the office of the\nclerk of the county of Albany and proved or acknowledged in the same\nmanner as a deed to be recorded, may appoint a trustee to represent the\nholders of such notes or bonds for 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 mortgages\npurchased and eligible loans made by it adequate to carry out any\nagreement as to, or pledge of, such fees and charges and interest and\namortization payments on such mortgages and loans and other properties\nand to require the agency to carry out any other agreements with the\nholders of such notes or 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 purchased by the agency or\nsecuring an eligible loan made by the agency, the trustee shall first\ngive thirty days' notice in writing to the governor, to the agency, to\nthe commissioner and to the attorney general of the state.\n