§ 1294 — Remedies of noteholders and bondholders

§ 1294. Remedies of noteholders and bondholders. 1. In the event that\nthe corporation shall default in the payment of principal of or interest\non any issue of notes or bonds after the same shall become due, whether\non any sinking fund payment date, at maturity or upon call for\nredemption, and such default shall continue for a period of thirty days,\nor in the event that the corporation shall fail or refuse to comply with\nthe provisions of this title or shall default in any agreement made with\nthe holders of any issue of notes or bonds, the holders of twenty-five\nper centum in aggregate principal amount of the notes or bonds of such\nissue then outstanding, by instrument or instruments filed in the office\nof the clerk of the county of Albany and proved or acknowledged in the\nsame manner as a deed to be recorded, may appoint a trustee to represent\nthe holders 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 corporation to collect\nrentals, rates, charges and other fees and to collect interest and\namortization payments on municipal bonds and notes and bonds and notes\nof any state agency held by it adequate to carry out any agreement as\nto, or pledge of, such rentals, rates, charges and other fees and of\nsuch interest and amortization payments, and to require the corporation\nto carry out any other agreements with the holders of such notes or\nbonds and to perform its duties under this title;\n (b) bring suit upon such notes or bonds;\n (c) by action or suit, require the corporation to account as if it\nwere the trustee of an express trust for the holders of such notes or\nbonds;\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 the principal of notes or bonds due and payable,\nthe trustee shall first give thirty days' notice in writing to the\ngovernor, to the corporation, to the comptroller and to the attorney\ngeneral of the state.\n