§ 907 — Remedies of bondholders

New York § 907

• Jurisdiction: New York
• Law PBA: Public Authorities
• Title 5: Long Island Market Authority
• Art. 4: Market Authorities

Text

§ 907. Remedies of bondholders. Subject to any resolution or\nresolutions adopted pursuant to this title:\n 1. In the event that the authority shall default in the payment of\nprincipal of or interest on any issue of bonds after the same shall\nbecome due, whether at maturity or upon call for redemption, and such\ndefault shall continue for a period of thirty days, or in the event that\nthe authority shall fail or refuse to comply with the provisions of this\ntitle or shall default in any agreement made with the holders of any\nissue of bonds, the holders of twenty-five percent in aggregate\nprincipal amount of the bonds of such issue then outstanding, by\ninstrument or instruments filed in the office of the clerk of the county\nin which the principal office of the authority is located and proved or\nacknowledged in the same manner as a deed to be recorded, may appoint a\ntrustee to represent the holders of such bonds for the purpose provided\nin this section.\n 2. Such trustee may, and upon written request of the holders of\ntwenty-five per centum in principal amount of such bonds outstanding\nshall, in its own name:\n (a) by action or proceeding in accordance with the civil practice law\nand rules, enforce all rights of the bondholders, including the right to\nrequire the authority to collect rents, rates, fees and charges adequate\nto carry out any agreement as to, or pledge of, such rents, rates, fees\nand charges and to require the authority to carry out any other\nagreements with the holders of such bonds to perform its duties under\nthis title;\n (b) bring an action or proceeding upon such bonds;\n (c) by action or proceeding, require the authority to account as if it\nwere the trustee of an express trust for the holders of such bonds;\n (d) by action or proceeding, enjoin any acts or things which may be\nunlawful or in violation of the rights of the holders of such bonds; and\n (e) declare all such bonds due and payable, and if all defaults shall\nbe made good, then with the consent of the holders of the twenty-five\nper centum of the principal amount of such bonds then outstanding, to\nannul 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 in this section or incident to the\ngeneral representation of bondholders in the enforcement and protection\nof their rights.\n 4. The supreme court shall have jurisdiction of any action or\nproceeding by the trustee on behalf of such bondholders. The venue of\nany such action or proceeding shall be in the county of Suffolk.\n 5. Before declaring the principal of bonds due and payable, the\ntrustee shall first give thirty days notice in writing to the authority.\n 6. Any such trustee, whether or not the issue of bonds represented by\nsuch trustee has been declared due and payable, shall be entitled as of\nright to the appointment of any receiver of any part or parts of the\nproject, the revenues of which are pledged for the security of the bonds\nof such issue, and such receiver may enter and take possession of such\npart or parts of the project and, subject to any pledge or agreement\nwith the holders of such bonds, shall take possession of all monies and\nother property derived from such part or parts of the project and\nproceed with any construction thereon or the acquisition of any\nproperty, real or personal, in connection therewith that the authority\nis under obligation to do, and to operate, maintain and reconstruct such\npart or parts of the project and collect and receive all revenues\nthereafter arising therefrom subject to any pledge or agreement with\nbondholders relating thereto and perform the public duties and carry out\nthe agreements and obligations of the authority under the direction of\nthe court. In any suit, action or proceeding by the trustee, the fees,\ncounsel fees and expenses of the trustee and of the receiver, if any,\nshall constitute taxable disbursements and all costs and disbursements\nallowed by the court shall be a first charge on any revenues derived\nfrom the properties.\n