§ 2440 — Remedies of bondholders and noteholders

New York § 2440

• Jurisdiction: New York
• Law PBA: Public Authorities
• Title 18: State of New York Municipal Bond Bank Agency Act
• Art. 8: Miscellaneous Authorities

Text

§ 2440. Remedies of bondholders and noteholders. (1) In the event that\nthe agency shall default in the payment of principal or of interest on\nany issue of bonds or notes after the same shall become due, whether at\nmaturity or upon call for redemption, and such default shall continue\nfor a period of thirty days, or in the event that the agency shall fail\nor refuse to comply with the provisions of this title, or shall default\nin any agreement made with the holders of any issue of bonds or notes,\nthe holders of twenty-five per centum in aggregate principal amount of\nthe bonds or notes of such issue then outstanding, by instrument or\ninstruments filed in the office of the clerk of the county in which the\nprincipal office of the agency is located, and proved or acknowledged in\nthe same manner as a deed to be recorded, may appoint a trustee to\nrepresent the holders of such bonds or notes for the purposes herein\nprovided.\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) enforce all rights of the bondholders or noteholders, including\nthe right to require the agency to collect interest and principal\npayments on the bonds held by it adequate to carry out any agreement as\nto, or pledge of, such interest and principal payments, and to require\nthe agency to carry out any other agreements with the holders of such\nbonds or notes and to perform its duties under this title:\n (b) bring suit upon such bonds or notes:\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 bonds or notes:\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 bonds or 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) Such trustee shall in addition to the foregoing have and possess\nall 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 (4) Before declaring the principal of bonds or notes due and payable,\nthe trustee shall first give thirty days' notice in writing to the\ngovernor, to the agency and to the attorney general of the state.\n (5) 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\ncounty in which the principal office of the agency is located.\n (6) The remedies granted by this section shall not apply to tax lien\ncollateralized securities. The remedies available to the holders of such\nsecurities shall be expressly limited to those set forth in the contract\nwith the owners of such securities.\n