N.Y. Public Authorities Law Section 1686
Remedies of bondholders


1.

In the event that the authority shall default in the payment of principal of or interest on any 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 the bonds, the holders of twenty-five per centum in aggregate principal amount of the bonds then outstanding by instrument or instruments filed in the office of the clerk of the county in which the dormitory is located 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 of the principal amount of the bonds then outstanding upon any dormitory shall, 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 rental and other revenues of any dormitory adequate to carry out any agreement as to, or pledge of, such rental and other 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 due and payable upon any dormitory, and if all defaults shall be made good, annul, upon the written consent of the holders of twenty-five per centum in principal amount of the bonds then outstanding, 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 the county in which the dormitory is located.

4.

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

5.

Any such trustee, whether or not all bonds have been declared due and payable, shall be entitled as of right to the appointment of a receiver who may enter and take possession of the dormitory or any part or parts thereof and operate and maintain the same and collect and receive all rentals and other revenues thereafter arising therefrom in the same manner as the authority itself might do and shall deposit all such moneys in a separate account and apply the same in such manner as the court shall direct. 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 rentals and other revenues derived from the dormitory.

6.

Such trustees 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.

Source: Section 1686 — Remedies of bondholders, https://www.­nysenate.­gov/legislation/laws/PBA/1686 (updated Sep. 22, 2014; accessed Dec. 21, 2024).

1675
Short title
1676
Definitions
1676‑A
Payment on authority public work projects
1677
Dormitory Authority
1678
Powers of the authority
1679
Supplemental higher education loan financing program
1679‑A
Health education assistance loan financing program
1679‑B
Equipment loans
1679‑C
The New York higher education loan program
1680
Dormitories at certain educational institutions other than state operated institutions and statutory or contract colleges under the juris...
1680‑A
Judicial facilities in certain counties
1680‑B
Court facilities and combined occupancy structures
1680‑C
Creation of the court facilities capital review board
1680‑D
Sale of bonds by the authority
1680‑E
State university athletic facilities
1680‑F
Roswell Park Cancer Institute development account
1680‑G
Child care facilities development program
1680‑H
Sale of bonds by the authority
1680‑I
Judiciary
1680‑J
New York state higher education capital matching grant board
1680‑J*2
Authorization for the issuance of bonds for the health care efficiency and affordability law for New Yorkers (HEAL NY) capital grant program
1680‑K
Financing of department of agriculture and markets facilities
1680‑L
The special disability fund financing
1680‑M
Cultural education facilities
1680‑N
Acquisition of state buildings and other facilities
1680‑O
Courthouse improvements and training facilities
1680‑P
Longitudinal data system
1680‑Q
State university of New York dormitory facilities
1680‑Q*2
Self-insured bond financing
1680‑R
Authorization for the issuance of bonds for the capital restructuring financing program, the health care facility transformation programs...
1681
Moneys of the authority
1681‑A
Distribution of board materials
1682
Bonds of the authority
1682‑A
Financial monitoring
1683
State not liable on bonds
1684
Bonds legal investments for fiduciaries
1685
Exemptions from taxation
1686
Remedies of bondholders
1686‑A
Security by authority
1687
Members and employees not to profit
1688
Visitation by regents
1689
Board of cooperative educational services school facilities
1689‑A
Public school districts
1689‑B
Sale of bonds by the authority
1689‑C
Capital facility program, authority financing of eligible projects
1689‑D
Bidding requirements
1689‑E
Biomedical facilities program, authority financing of eligible projects
1689‑F
Public school districts
1689‑G
Local government infrastructure
1689‑H
Expedited deployment funding
1689‑I
Library construction
1689‑I*2
Public school districts
1690
Contract of the state
1691
Actions against authority
1693
Title not affected if in part unconstitutional or ineffective
1694
Termination of authority

Accessed:
Dec. 21, 2024

Last modified:
Sep. 22, 2014

§ 1686’s source at nysenate​.gov

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