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This entry was published on 2014-09-22
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SECTION 2799-KKK
Remedies of bondholders
Public Authorities (PBA) CHAPTER 43-A, ARTICLE 8, TITLE 34
§ 2799-kkk. Remedies of bondholders. Subject to any resolution or
resolutions adopted pursuant to this title:

1. In the event that the authority shall default in the payment of
principal or of interest on any issue of bonds after the same shall
become due, whether at maturity or upon call for redemption, and such
default shall continue for a period of thirty days, or in the event that
the authority shall fail or refuse to comply with the provisions of this
title or shall default in any agreement made with the holders of any
issue of bonds, the holders of twenty-five percent in aggregate
principal amount of the bonds of such issue then outstanding, by
instrument or instruments filed in the office of the clerk of the county
in which the principal office of the authority is located and proved or
acknowledged in the same manner as a deed to be recorded, may appoint a
trustee to represent the holders of such bonds for the purpose herein
provided.

2. Such trustee may, and upon written request of the holders of
twenty-five per centum in principal amount of such bonds outstanding,
shall in its own name:

(a) by action or proceeding in accordance with the civil practice law
and rules, enforce all rights of the bondholders, including the right to
require the authority to collect rents, rates, fees and charges adequate
to carry out any agreement as to, or pledge of, such rents, rates, fees
and charges and to require the authority to carry out any other
agreements with the holders of such bonds to perform its duties under
this title;

(b) bring an action or proceeding upon such bonds;

(c) by action or proceeding, require the authority to account as if it
were the trustee of an express trust for the holders of such bonds;

(d) by action or proceeding, enjoin any acts or things which may be
unlawful or in violation of the rights of the holders of such bonds; and

(e) declare all such bonds due and payable, and if all defaults shall
be made good, then with the consent of the holders of twenty-five per
centum of the principal amount of such bonds then outstanding, to annul
such declaration and its consequences.

3. Such 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 in this title or incident to the
general representation of bondholders in the enforcement and protection
of their rights.

4. The supreme court shall have jurisdiction of any action or
proceeding by the trustee on behalf of such bondholders. The venue of
any such action or proceeding shall be laid in the county.

5. Before declaring the principal of bonds due and payable, the
trustee shall first give thirty days notice in writing to the authority.

6. Any such trustee whether or not the issue of bonds represented by
such trustee has been declared due and payable, shall be entitled as of
right to the appointment of a receiver of any part or parts of the
project, the revenues of which are pledged for the security of the bonds
of such issue, and such receiver may enter and take possession of such
part or parts of the project and, subject to any pledge or agreement
with the holders of such bonds, shall take possession of all moneys and
other property derived from such part or parts of the project and
proceed with any construction thereon or the acquisition of any
property, real or personal, in connection therewith that the authority
is under obligation to do, and operate, maintain and reconstruct such
part or parts of the project and collect and receive all revenues
thereafter arising therefrom subject to any pledge or agreement with
bondholders relating thereto and perform the public duties and carry out
the agreements and obligations of the authority under the direction of
the court. In any suit, action or proceeding by the trustee, the fees,
counsel fees and expenses of the trustee and of the receiver, if any,
shall constitute taxable disbursements and all costs and disbursements
allowed by the court shall be a first charge on any revenues derived
from the project.