N.Y. PML Law § 512 — New York Code / Act PML / Article 5 / Section 512
Remedies of holders of bonds and notes
Status: in_force

§ 512. Remedies of holders of bonds and notes. 1. In the event that a\ncorporation defaults in the payment of the principal of or interest on\nany issue of bonds or notes after the same becomes due, whether at\nmaturity or upon call for redemption, and such default continues for a\nperiod of thirty days, or in the provisions of this article, or defaults\nin any agreement made with the holders of any issue of the bonds or\nnotes, the holders of twenty-five percent in aggregate principal amount\nof the bonds or notes of such issue then outstanding, by instrument or\ninstruments filed in the office of the clerk of any county in which the\ncorporation operates and approved or acknowledged in the same manner as\na deed to be recorded, may appoint a trustee to represent the holders of\nsuch bonds or notes for the purposes herein provided.\n  2. Such trustee may, and upon written request of the holders of\ntwenty-five percent in principal amount of such bonds or notes then\noutstanding shall, in his, her or its own name:\n  a. by suit, action or special proceedings enforce all rights of the\nholders of the bonds or notes, including the right to require the\ncorporation to carry out any agreements with such holders and to perform\nits duties under this title;\n  b. bring suit upon such bonds or notes;\n  c. by action or suit, require the corporation to account as if it were\nthe trustee of an express trust for the holders of such bonds or notes;\n  d. by action or suit, enjoin any acts or things that may be unlawful\nor in violation of the rights of the holders of such bonds or notes; and\n  e. declare all such bonds or notes due and payable, and if all\ndefaults shall be made good, then, with the consent of the holders of\ntwenty-five percent of the principal amount of such bonds or notes then\noutstanding, annul such declaration and its consequences.\n  3. The supreme court shall have jurisdiction of any suit, action or\nproceedings by the trustee on behalf of such holders of bonds or notes.\nThe venue of any such suit, action or proceeding shall be in the\njudicial district in which the principal office of the corporation is\nlocated.\n  4. Before declaring the principal of bonds or notes due and payable,\nthe trustee shall first give thirty days' notice in writing to the\ncorporation, the governor, the comptroller and the attorney general of\nthe state.\n  5. Any such trustee, whether or not the issue of bonds represented by\nsuch trustee has been declared due and payable, shall be entitled as of\nright to the appointment of a receiver of the revenues which are pledged\nfor the security of the bonds of such issue, and such receiver may enter\nand take possession of the premises, equipment and property which the\ncorporation is operating or is entitled to use or occupy, and shall take\npossession of all revenues of the corporation and other moneys to which\nthe corporation is entitled, and shall proceed to conduct pari-mutuel,\noff-track betting pursuant to the provisions of this article in the\nplace and stead of the corporations from which otherwise, under such\narticle, would constitute revenues of the corporation and shall perform\nthe public duties and carry out the agreements and obligations of the\ncorporation under the direction of the court. In any action or\nproceeding by the trustee, the fees, counsel fees and expenses of the\ntrustee and of the receiver, if any, shall constitute taxable\ndisbursements allowed by the court and shall be a first charge on any\nrevenues of the corporation.\n  6. Such trustee shall in addition to the foregoing have and possess\nall the powers necessary or appropriate for the exercise of any function\nspecifically set forth herein or incident to the general representation\nof the holders of such bonds or notes in the enforcement and protection\nof their rights.\n