§ 42-55-17. Remedies of bondholders and note holders.
(a) In the event that the corporation shall default in the payment of principal of or
interest on any bonds or notes issued under this chapter after they shall become due,
whether at maturity or upon call for redemption, and that default shall continue for
a period of thirty (30) days, or in the event that the corporation shall fail or refuse
to comply with the provisions of this chapter, or shall default in any agreement made
with the holders of an issue of bonds or notes of the corporation, the holders of
twenty-five percent (25%) in aggregate principal amount of the bonds or notes of the
issue then outstanding, by instrument or instruments filed in the office of the secretary
of state and proved or acknowledged in the same manner as a deed to be recorded, may
appoint a trustee to represent the holders of the bonds or notes for the purposes
provided in this section.
(b) The trustee may, and upon written request of the holders of twenty-five percent (25%)
in principal amount of the bonds or notes then outstanding shall, in the trustee's
own name:
(1) Enforce all rights of the bondholders or note holders, including the right to require
the corporation to collect interest and amortization payments on the mortgages held
by it adequate to carry out any agreement as to, or pledge of, the interest and amortization
payments, and to require the corporation to carry out any other agreements with the
holders of the bonds or notes and to perform its duties under this chapter;
(2) Enforce all rights of the bondholders or note holders, including the right to collect
and enforce the payment of principal of and interest due or becoming due on loans
to mortgage lenders and collect and enforce any collateral securing the loans or sell
that collateral, so as to carry out any contract as to, or pledge of, revenues, and
to require the corporation to carry out and perform the terms of any contract with
the holders of the bonds or notes or its duties under this chapter;
(3) Bring suit upon all or any part of the bonds or notes;
(4) By action or suit, require the corporation to account as if it were the trustee of
an express trust for the holders of the bonds or notes;
(5) By action or suit, enjoin any acts or things that may be unlawful or in violation
of the rights of the holders of the bonds or notes;
(6) Declare all bonds or notes due and payable and if all defaults shall be made good
then with the consent of the holders of twenty-five percent (25%) of the principal
amount of the bonds or notes then outstanding, annul the declaration and its consequences.
(c) The trustee shall in addition to the foregoing have and possess all of the powers
necessary or appropriate for the exercise of any functions specifically set forth
herein or incident to the general representation of bondholders or note holders in
the enforcement and protection of their rights.
(d) Before declaring the principal of bonds or notes due and payable, the trustee shall
first give thirty (30) days' notice in writing to the governor, to the corporation,
and to the attorney general of the state.
(e) The superior court of Providence County shall have jurisdiction of any suit, action,
or proceeding by the trustee on behalf of bondholders or note holders.