Public Authorities Law Section 162
Remedies of bondholders
1.In the event that the authority shall default in the payment of principal of or interest on any issue of the 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 the bonds, the holders of twenty-five per centum in aggregate principal amount of such issue then outstanding by instrument or instruments filed in the office of the clerk of the county of Nassau or of Suffolk and proved or acknowledged in the same manner as a deed to be recorded may appoint a trustee, to represent the bondholders for the purposes herein provided.
2.Such trustee may, and upon written request of the holders of twenty-five per centum in principal amount of such issue of bonds then outstanding shall upon being furnished security satisfactory to the trustee for the recovery of his or its expense and against loss and liability in his or its own name (a) by suit, action or special proceeding, enforce all rights of the bondholders, including the right to require the authority and the board to collect revenues adequate to carry out any agreement as to, or pledge of, such revenues and to require the authority and the board to carry out any other agreements with the bondholders and to perform its and their duties under this title;
(b)bring suit upon the bonds;
(c)by action or suit in equity, require the authority to account as if it were the trustee of an express trust for the bondholders;
(d)by action or suit in equity, enjoin any acts or things which may be unlawful or in violation of the rights of the bondholders;
(e)declare all bonds of such issue 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 issue then outstanding, to annul such declaration and its consequences.
3.The supreme court shall have jurisdiction of any suit, action or proceeding by the trustee on behalf of the bondholders. The venue of any such suit, action or proceeding shall be laid in Nassau county or Suffolk county.
4.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 said part or parts of the project and subject to any pledge or agreement with bondholders shall take possession of all moneys and other property derived from or applicable to the construction, operation, maintenance and reconstruction of said part or parts of the project and proceed with any construction thereon which the authority is under obligation to do and to operate, maintain and reconstruct the said part or parts of the project and collect and receive all revenues thereafter arising therefrom subject to any pledge thereof 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.
5.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 herein or incident to the general representation of the bondholders in the enforcement and protection of their rights.
6.All bonds issued pursuant to the same resolution, although issued at different times and with different terms and provisions and although supplemental resolutions may be required prior to the issuance of part of such bonds, shall constitute one issue for the purposes of this section, but any resolution may provide that the bonds issued pursuant thereto shall constitute one or more separate issues for the purposes of this section. * NB (Authority abolished June 30, 1978)
Section 162 — Remedies of bondholders,
https://www.nysenate.gov/legislation/laws/PBA/162 (updated Sep. 22, 2014; accessed Dec. 2, 2023).