§ 1149-H — Remedies of bondholders

New York § 1149-H

• Jurisdiction: New York
• Law PBA: Public Authorities
• Title 6-E: Seneca County Water and Sewer Authority
• Art. 5: Public Utility Authorities

Text

§ 1149-h. Remedies of bondholders. Subject to any resolution or\nresolutions adopted pursuant to applicable provisions of this title:\n 1. In the event that the authority shall default in the payment of\nprincipal of or interest on any issue of the bonds after the same shall\nbecome due whether at maturity or upon call for redemption, and such\ndefault shall continue for a period of thirty days, or in the event that\nthe authority shall fail or refuse to comply with the provisions of this\ntitle, or shall default in any agreement made with the holders of any\nissue of the bonds, the holders of twenty-five per centum in aggregate\nprincipal amount of the bonds of such issue then outstanding, by\ninstrument or instruments filed in the office of the clerk of the county\nand proved or acknowledged in the same manner as a deed to be recorded,\nmay appoint a trustee to represent the holders of such bonds for the\npurposes herein provided.\n 2. Such trustee may, and upon written request of the holders of\ntwenty-five per centum in principal amount of such bonds outstanding\nshall, in such trustee's own name:\n (a) by action or proceeding in accordance with the civil practice law\nand rules, enforce all rights of the bondholders including the right to\nrequire the authority to collect rents, rates, fees, and charges\nadequate to carry out any agreement as to, or pledge of, such rents,\nrates and charges, and to require the authority to carry out any other\nagreements with the holders of such bonds and to perform its duties\nunder this title;\n (b) bring an action or proceeding upon such bonds;\n (c) by action or proceeding, require the authority to account as if it\nwere the trustee of an express trust for the holders of such bonds;\n (d) by action or proceeding, enjoin any acts or things which may be\nunlawful or in violation of the rights of the holders of such bonds; and\n (e) declare all such bonds due and payable, and if all defaults shall\nbe made good, then with the consent of the holders of twenty-five per\ncentum of the principal amount of such bonds then outstanding, annul\nsuch 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 incidental to the general\nrepresentation of bondholders in the enforcement and protection of their\nrights.\n 4. The state supreme court shall have jurisdiction of any action or\nproceeding by the trustee on behalf of such bondholders. Venue of any\nsuch action or proceeding shall be laid in the county.\n 5. Any such trustee, whether or not the issue of bonds represented by\nsuch trustee has been declared due and payable, shall be entitled as of\nright to the appointment of a receiver of any part or parts of the\nproperties the revenues of which are pledged for the security of the\nbonds of such issue, and, subject to any pledge or agreement with\nholders of such bonds, such receiver may enter and take possession of\nsuch part or parts of the properties and shall take possession of all\nmoneys and other property derived from such part or parts of such\nproperties and proceed with any construction thereon or the acquisition\nof any property, real or personal, in connection therewith which the\nauthority is under obligation to do, and to operate, maintain and\nreconstruct such part or parts of the properties and collect and receive\nall revenues thereafter arising therefrom subject to any pledge thereof\nor agreement with bondholders relating thereto and perform the public\nduties and carry out the agreements and obligations of the authority\nunder the direction of the court. In any suit, action or proceeding by\nthe trustee, the fees, counsel fees and expenses of the trustee and of\nthe receiver, if any, shall constitute taxable disbursements and all\ncosts and disbursements allowed by the court shall be a first charge on\nany revenues derived from the properties.\n 6. Before declaring the principal of bonds due and payable, the\ntrustee shall first give thirty days notice in writing to the authority.\n