§ 1865 — Rights and remedies of bondholders and noteholders

§ 1865. Rights and remedies of bondholders and noteholders. The\nholders of bonds and notes shall have the following rights and remedies,\nsubject to the terms of the resolution authorizing such bonds and notes\nor any trust indenture, secured loan agreement or other instrument\nrelated thereto:\n 1. In the event that the authority shall default in the payment of\nprincipal of or interest on any issue of bonds or notes after the same\nshall become due, whether at maturity or upon call for redemption, and\nsuch default shall continue for a period of thirty days, or in the event\nthat the authority shall fail or refuse to comply with the provisions of\nthis title, or shall default in any contract made with the holders of\nany issue of bonds or notes, the holders of twenty-five per centum in\naggregate principal amount of the bonds or notes of such issue then\noutstanding, by instrument or instruments filed in the office of the\nclerk in the county of Albany and approved or acknowledged in the same\nmanner as a deed to be recorded, may appoint a trustee to represent the\nholders of such bonds or notes 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 bonds or notes then\noutstanding shall, in his or its own name\n (a) by suit, action or special proceeding, enforce all rights of the\nbondholders or noteholders, including the right to require the authority\nto collect fees, rentals and charges adequate to carry out any\nagreements with the holders of such bonds or notes and to perform its\nduties under this title;\n (b) bring suit upon such bonds or notes;\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 bonds\nor notes;\n (d) by action or suit in equity, enjoin any act or things which may be\nunlawful or in violation of the rights of the holders of such bonds or\nnotes;\n (e) declare all such bonds or notes 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 bonds or notes\nthen outstanding, to annul such declaration and its consequences.\n 3. Such trustee, whether or not the issuance of bonds or notes\nrepresented by such trustee had been declared due and payable, shall be\nentitled as of right to the appointment of a receiver of any property of\nthe authority, the fees, rentals, charges or other revenues of which are\npledged for the security of the bonds or notes of such issue and such\nreceiver may enter and take possession of such property, or any part or\nparts thereof and operate and maintain the same and receive all fees,\ncharges, rentals and other revenues thereafter arising therefrom and\nexercise such other powers of the authority as the court may deem\nadvisable and perform the public duties and carry out the agreements and\nobligations of the authority under the direction of the court. In any\nsuit, action or proceeding by the trustee the fees, counsel fees and\nexpenses of the trustee and of the receiver, if any, shall constitute\ntaxable disbursements and all costs and disbursements allowed by the\ncourt shall be a first charge on any fees, charges, rentals and other\nrevenues derived from such properties.\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 bondholders or noteholders.\nThe venue of any such suit, action or proceeding shall be laid in the\ncounty of Albany.\n 6. Before declaring the principal of bonds or notes due and payable,\nthe trustee shall first give thirty days' notice in writing to the\ngovernor, to the authority, to the comptroller and to the\nattorney-general of the state.\n