§ 31-20-17 — Default in payment of principal or interest

In the event the authority shall default in the payment of principal of or interest on any issue of its notes, security interests or bonds after they become due, whether at maturity or upon call for redemption, and such default continues for a period of thirty days, or in the event the authority fails or refuses to comply with the provisions of this article or defaults in any agreement made with the holders of any issue of notes, security interests or bonds, the holders of twenty-five percent in aggregate principal amount of the notes, security interests or bonds of such issue then outstanding, by instrument or instruments filed in the office of the clerk of the county commission of any county in which the authority operates and has an office and acknowledged in the same manner as a deed to be recorded, may appoint a trustee to represent the holders of such notes, security interests or bonds for the purposes herein provided:

(a) Any such trustee, upon the written request of the holders of twenty-five percent in the principal amount of such notes, security interests or bonds of the authority then outstanding, shall, in his or its own name, do any one or more of the following:

(1) By civil action or other proceeding, enforce all rights of the noteholders, holders of security interests or bondholders, including the right to require the authority to perform its duties under this article;

(2) Bring a civil action upon such notes, security interests or bonds;

(3) By civil action or other proceeding, require the authority to account as if it were the trustee of an express trust for the holders of such notes, security interests or bonds;

(4) By civil action or other proceeding, enjoin any acts or things which may be unlawful or in violation of the rights of the holders of such notes, security interests or bonds; or

(5) Declare all such notes, security interests or bonds due and payable, and, if all defaults are made good, then annul such declaration and its consequences.

(b) In addition to the foregoing, such trustee shall 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 holders of notes, security interests or bonds of the authority in the enforcement and protection of their rights.

(c) Before declaring the principal of any notes, security interests or bonds due and payable, the trustee shall first give thirty days' notice in writing to the authority.

Legislative History

1985 Reg. Sess., SB232