§ 2543 — Remedies of noteholders and bondholders

§ 2543. Remedies of noteholders and bondholders. 1. In the event that\nthe corporation shall default in the payment of principal of or interest\non or sinking fund payment on any issue of notes or bonds after the same\nshall become due, whether at maturity or upon call from redemption, or\nin the event that the corporation shall default in any agreement made\nwith the holders of any issue of notes or bonds, the holders of\ntwenty-five per centum in aggregate principal amount of the notes or\nbonds of such issue then outstanding, by instrument or instruments filed\nin the office of the clerk of the county of New York and proved or\nacknowledged in the same manner as a deed to be recorded, may appoint a\ntrustee to represent the holders of such notes or bonds for the purposes\nherein 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 carry out\nany agreement with such holders and to perform its duties under this\ntitle;\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 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 such noteholders or bondholders.\nThe venue of any such suit, action or proceeding shall be laid in the\ncounty of New York.\n 4. Before declaring the principal of notes or bonds due and payable,\nthe trustee shall first give thirty days' notice in writing to the\ncorporation, the mayor and to the attorney general of the state.\n