§ 2878 — Supervision

§ 2878. Supervision. 1. The commissioner may from time to time make,\nalter, amend and repeal rules and regulations for the supervision,\nexamination, regulation and audit of an eligible borrower and for\ncarrying into effect the provisions and purposes of this article, and\neach eligible borrower shall submit an annual report of its operations\nto the commissioner and the agency who may examine and audit the books\nand records of the eligible borrower at any time.\n 2. The commissioner and the department of health shall have power to\nact for and in behalf of the agency in servicing the hospital loans of\nthe agency, and to perform such functions and services in connection\nwith the making, servicing and collection of such loans as shall be\nrequested by the agency.\n 3. (a) The commissioner and the department may, with respect to any\nhospital project of which the agency has acquired the fee or otherwise,\nenter into an agreement with said agency subject to the approval of the\ndirector of the budget, for the department, as provided in paragraph (b)\nof this subdivision, to operate the said project in a manner consistent\nwith the purposes of this article. In such event, the commissioner, on\nbehalf of the department, shall have the power to use any available\nfunds to pay all operating expenses and to comply with all the terms and\nprovisions of the mortgage, if any, as though the mortgage had not been\nforeclosed, or any other applicable agreement and to comply with the\nprovisions of this article.\n (b) Subject to the provisions of the agreement with said agency, the\ncommissioner may contract with any person, firm or corporation which he\ndeems qualified to operate and manage such project and to perform such\nduties and functions as he may deem necessary.\n 4. Whenever the commissioner shall be of the opinion that an eligible\nborrower is failing or omitting, or is about to fail or omit to do\nanything required of it by law or by order of the commissioner and is\ndoing or is about to do anything, or permitting anything, or is about to\npermit anything to be done, contrary to or in violation of law or of any\norder of the commissioner, or which is improvident or prejudicial to the\ninterest of the public, the lienholders, the shareholders, or the\noccupants, the commissioner may, in addition to such other remedies as\nmay be available, commence an action or proceeding in the supreme court\nof the state of New York in the name of the commissioner, for the\npurpose of having such violations or threatened violations stopped and\nprevented, and in such action or proceeding, the court may appoint a\ntemporary or permanent receiver or both. Such action or proceeding shall\nbe commenced by a petition to the supreme court, alleging the violation\ncomplained of and praying for appropriate relief. It shall thereupon be\nthe duty of the court to specify the time, not exceeding twenty days\nafter service of a copy of the petition, within which the eligible\nborrowers complained of must answer the petition. In case of any default\nor after answer the court shall immediately inquire into the facts and\ncircumstances in such manner as the court shall direct in the interest\nof substantial justice without other or formal pleading. Such other\npersons or corporations as it shall seem to the court necessary or\nproper to join as parties in order to make its order or judgment\neffective, may be joined as parties. The final judgment in any such\naction or proceeding shall either dismiss the action or proceeding or\ndirect that an order or an injunction, or both, issue, or provide for\nthe appointment of a receiver as prayed for in the petition, or grant\nsuch other relief as the court may deem appropriate.\n