§ 368 — Remedies of noteholders and bondholders

§ 368. Remedies of noteholders and bondholders. 1. In the event that\nthe authority shall default in the payment of principal of or interest\non any issue of notes or bonds after the same shall become due, whether\nat maturity or upon call for redemption, and such default shall continue\nfor a period of thirty days, or in the event that the authority shall\nfail or refuse to comply with the provisions of this title, or shall\ndefault in any agreement made with the holders of any issue of notes or\nbonds, the holders of twenty-five per centum in aggregate principal\namount of the notes or bonds of such issue then outstanding, by\ninstrument or instruments filed in the office of the clerk of the county\nof Albany and proved or acknowledged in the same manner as a deed to be\nrecorded, may appoint a trustee to represent the holders of such notes\nor 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 mandamus or other suit, action or proceeding at law or in\nequity enforce all rights of the noteholders or bondholders, including\nthe right to require the authority to collect fees, rentals and charges\nadequate to carry out any 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 in equity, require the authority to account as\nif it were the trustee of an express trust for the holders of such notes\nor bonds;\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 notes\nor 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;\nprovided, however, that this clause (e) shall not be applicable in the\ncase of notes or bonds guaranteed by the state.\n 3. 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 thruway, the fees, rentals, charges or other revenues of\nwhich are pledged for the security of the bonds or notes of such issue\nand such receiver may enter and take possession of such part or parts of\nthe thruway and, subject to any pledge or agreement with bondholders,\nshall take possession of all moneys and other property derived from or\napplicable to the construction, operation, maintenance and\nreconstruction of such part or parts of the thruway and proceed with any\nconstruction thereon which the authority is under obligation to do and\nshall operate, maintain and reconstruct such part or parts of the\nthruway, and collect and receive all fees, rentals, charges and other\nrevenues thereafter arising therefrom subject to any pledge thereof or\nagreement with bondholders or noteholders relating thereto and perform\nthe public duties and carry out the agreements and obligations of the\nauthority under the direction of the court. In any suit, action or\nproceeding by the trustee the fees, counsel fees and expenses of the\ntrustee and of the receiver, if any, shall constitute taxable\ndisbursements and all costs and disbursements allowed by the court shall\nbe a first charge on any tolls, rentals and other revenues derived from\nsuch part or parts of the thruway.\n 4. 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 5. 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 6. Before declaring the principal of notes or bonds not guaranteed by\nthe state due and payable, the trustee shall first give thirty days'\nnotice in writing to the authority.\n