§ 50 — Remedies of noteholders and bondholders

§ 50. Remedies of noteholders and bondholders. 1. In the event that\nthe agency shall default in the payment of principal of or interest on\nany issue of notes or bonds after the same shall become due, whether at\nmaturity or upon call for redemption, and such default shall continue\nfor a period of thirty days, or in the event that the agency shall fail\nor refuse to comply with the provisions of this article, 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 approved or acknowledged in the same manner as a deed to\nbe recorded, may appoint a trustee to represent the holders of such\nnotes or 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 action or special proceeding in accordance with the civil\npractice law and rules, enforce all rights of the noteholders or\nbondholders, including the right to require the agency to collect fees\nand charges and interest and amortization payments on mortgage loans\nmade by it adequate to carry out any agreement as to, or pledge of, such\nfees and charges and interest and amortization payments on such\nmortgages, and other properties and to require the agency to carry out\nany other agreements with the holders of such notes or bonds and to\nperform its duties under this title;\n (b) bring suit upon such notes or bonds;\n (c) by action or special proceeding require the agency 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 special proceeding enjoin any acts or things which\nmay be unlawful or in violation of the rights of the holders of such\nnotes or 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.\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 herein or incident to the general\nrepresentation of bondholders or noteholders in the enforcement and\nprotection of their rights.\n 4. 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 5. Before declaring due and payable the principal of notes or bonds\nissued in connection with any mortgage or other obligation securing a\nmortgage loan made by the agency, the trustee shall first give thirty\ndays' notice in writing to the governor, to the agency, to the\ncommissioner of housing and community renewal, the state commissioner of\nhealth, the state commissioner of mental hygiene or the state\ncommissioner of social services, as the case may be, and to the attorney\ngeneral of the state.\n