§ 537 — Remedies of bondholders

§ 537. Remedies of bondholders. 1. In the event that the authority\nshall default in the payment of principal of or interest on any of the\nbonds as the same shall become due, whether at maturity or upon call for\nredemption, and such default shall continue for a period of thirty days,\nor in the event that the authority shall fail or refuse to comply with\nthe provisions of this title, or shall default in any agreement made\nwith the holders of the bonds, the holders of twenty-five per centum in\naggregate principal amount of the bonds then outstanding, by instrument\nor instruments filed in the office of the clerk of the county of\nDutchess, Ulster, Greene or Columbia and proved or acknowledged in the\nsame manner as a deed to be recorded, may appoint a trustee, to\nrepresent the bondholders 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 the bonds then outstanding\nshall, in his or its own name\n (a) By suit, action or special proceeding, enforce all rights of the\nbondholders, including the right to require the authority and the board\nto collect tolls and rentals adequate to carry out any agreement as to,\nor pledge of, such tolls and rentals, and to require the authority and\nthe board to carry out any other agreement with the bondholders and to\nperform its and their duties under this title;\n (b) Bring suit upon the 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 bondholders;\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 bondholders;\n (e) Declare all bonds due and payable and if all defaults shall have\nbeen made good, then upon written request of twenty-five per centum in\nprincipal amount of the bonds then outstanding, shall annul such\ndeclaration and its consequences.\n 3. The supreme court shall have jurisdiction of any suit, action or\nproceeding by the trustee on behalf of the bondholders. The venue of any\nsuch suit, action or proceeding shall be laid in Dutchess, Ulster,\nGreene or Columbia county.\n 4. Before declaring the principal of all bonds due and payable the\ntrustee shall first give notice in writing to the authority and to the\nattorney-general of the state of New York and if, when such notice is\ngiven to the attorney-general the legislature shall be in session, the\ntrustee shall not declare the principal of the bonds due before the\nlegislature adjourns sine die, or if the legislature be not then in\nsession the trustee shall not declare the principal of the bonds due\nuntil such an adjournment of the next regular session. If at such\nsession the legislature shall take any action as a result of which past\ndue principal and interest with interest on past due interest, together\nwith the fees, counsel fees and expenses of the trustee and of the\nreceiver, if any, as fixed by the court, shall be paid within sixty days\nof its adjournment, default in the payment thereof shall thereby be\ncured.\n 5. Any such trustee shall, whether or not all bonds have been declared\ndue and payable, be entitled as of right to the appointment of a\nreceiver who may enter and take possession of the bridges or any part or\nparts thereof and operate and maintain the same and collect and receive\nall tolls, rentals and other revenues thereafter arising therefrom in\nthe same manner as the authority itself might do and shall deposit all\nsuch moneys in a separate account and apply the same in such manner as\nthe court shall direct. In any suit, action or proceedings by the\ntrustee the fees, counsel fees and expenses of the trustee and of the\nreceiver, if any, shall constitute taxable disbursements and all costs\nand disbursements allowed by the court shall be a first charge on any\ntolls, rentals and other revenues derived from the bridges.\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 the bondholders in the enforcement and protection of\ntheir rights.\n 7. Whenever the word "bonds" or the word "bondholders" shall have been\nused in this section five hundred and thirty-seven said word shall be\ndeemed to apply only to the bonds or the holders of the bonds of the\nparticular series affected by the default or failure, and the remedies\nconferred by this section shall be available only to the holders of the\nbonds of the series, and shall apply only to the bridge or bridges\naffected by such default or failure.\n