§ 1168 — Remedies of bondholders

New York § 1168

• Jurisdiction: New York
• Law PBA: Public Authorities
• Title 7: Onondaga County Water Authority
• Art. 5: Public Utility Authorities

Text

§ 1168. Remedies of bondholders. 1. In the event that the authority\nshall default in the payment of principal of or interest on any issue of\nthe bonds after the same shall become due, whether at maturity or upon\ncall for redemption, and such default shall continue for a period of\nthirty days, or in the event that the authority shall fail or refuse to\ncomply with the provisions of this title, or shall default in any\nagreement made with the holders of any issue of the bonds, the holders\nof twenty-five per centum in aggregate principal amount of the bonds of\nsuch issue then outstanding, by instrument or instruments filed in the\noffice of the clerk of the county of Onondaga and proved or acknowledged\nin the same manner as a deed to be recorded, may appoint a trustee to\nrepresent the holders of such 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 bonds then\noutstanding shall, in his or its own name\n (a) by suit, action or special proceeding enforce all rights of the\nbondholders, including the rights to require the authority to collect\nrevenues, rates, rentals, fees and other charges adequate to carry out\nany agreement as to, or pledge of such revenues, rates, rentals, fees\nand other 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 suit upon such bonds;\n (c) by action or suit in equity, require the authority to account as\nif it were the trustee of an express trust for the holders of such\nbonds;\n (d) by action or suit in equity, enjoin any acts or things which may\nbe unlawful or in violation of the rights of the holders of such bonds;\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, to annul\nsuch declaration and its consequences.\n 3. The supreme court shall have jurisdiction of any suit, action or\nproceeding by the trustee on behalf of bondholders.\n 4. Before declaring the principal of all such bonds due and payable\nthe trustee shall first give thirty days' notice in writing to the\nauthority.\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 such receiver may enter and take possession of\nsuch part or parts of the properties and subject to any pledge or\nagreement with bonders shall take possession of all moneys and other\nproperty derived from such part or parts of the properties and proceed\nwith any construction thereon or the acquisition of any property, real\nor personal in connection therewith which the authority is under\nobligation to do, and to operate, maintain and reconstruct such part or\nparts of the properties and collect and receive all revenues thereafter\narising therefrom subject to any pledge thereof or agreement with\nbondholders relating thereto and perform the public duties and carry out\nthe agreements and obligations of the authority under the direction of\nthe court. In any suit, action or proceeding by the trustee the fees,\ncounsel fees and expenses of the trustee and of the receiver, if any,\nshall constitute taxable disbursements and all costs and disbursements\nallowed by the court shall be a first charge on any revenues derived\nfrom the properties.\n 6. Such trustees 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 in the enforcement and protection of their\nrights.\n