§ 1207-H — Remedies of bondholders and noteholders

§ 1207-h. Remedies of bondholders and noteholders. 1. In the event\nthat the authority shall default in the payment of principal of or\ninterest on any issue of the bonds or notes after the same shall become\ndue, whether at maturity or upon call for redemption, and such default\nshall continue for a period of thirty days, or in the event that the\nauthority 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 bonds or notes, the holders of twenty-five per centum in\naggregate principal amount of the bonds or notes of such issue then\noutstanding, by instrument or instruments filed in the office of the\nclerk of the county of New York, or Queens or the Bronx or Kings and\nproved or acknowledged in the same manner as a deed to be recorded, may\nappoint a trustee to represent the holders of such bonds or notes for\nthe 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 or notes then\noutstanding shall, in his or its own name\n (a) by a proceeding under article seventy-eight of the civil practice\nact or other suit, action or proceeding at law or in equity enforce all\nrights of the bondholders or noteholders, including the right to require\nthe authority and the board to collect fares and revenues adequate to\ncarry out any agreement as to, or pledge of, such fares and revenues,\nand to require the authority and the board to carry out any other\nagreements with the holders of such bonds or notes and to perform its\nand their duties under this title;\n (b) bring suit upon such bonds or notes;\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 bonds\nor notes;\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\nor notes;\n (e) declare all such bonds or notes 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 bonds or notes\nthen outstanding, to annul such 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 or noteholders. The\nvenue of any such suit, action or proceeding shall be laid in the county\nof New York, Queens, the Bronx, or Kings.\n 4. Before declaring the principal of all such bonds or notes due and\npayable the trustee shall first give thirty days' notice in writing to\nthe authority and the city.\n 5. Any such trustee, whether or not the issue of bonds or notes\nrepresented by such trustee has been declared due and payable, shall be\nentitled as of right to the appointment of a receiver of any part or\nparts of the fares or other revenues which are pledged for the security\nof the bonds or notes of such issue, and such receiver may enter and\ntake possession of such part or parts of the transit facilities of the\nauthority and, subject to any pledge or agreement with bondholders or\nnoteholders, shall take possession of all moneys and other property\nderived from or applicable to the maintenance and operation of the\ntransit facilities operated by the authority and operate, maintain and\nreconstruct such part or parts of said transit facilities and collect\nand receive all fares and other revenues thereafter arising therefrom,\nsubject to any pledge thereof or agreement with bondholders or\nnoteholders relating thereto, and perform the public duties and carry\nout the agreements and obligations of the authority under the direction\nof the 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 fares and other\nrevenues derived from such transit facilities.\n 6. 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