N.Y. RPP Law § 120-A — New York Code / Act RPP / Article 4 / Section 120-A
Liquidation of mortgage by trustee
Status: in_force

§ 120-a. Liquidation of mortgage by trustee. Any banking corporation\nor individual acting as trustee in respect to any mortgage upon real\nproperty against which bonds shall have been issued to the public and\nwhich mortgage shall have been given to such trustee by a corporation\norganized under the provisions of section one hundred twenty-one hereof,\npursuant to a plan of reorganization approved by the court and which\nbecame effective under section one hundred twenty-two hereof, or which\nmortgage shall have been given pursuant to a plan of reorganization\nheretofore or hereafter approved and confirmed under the bankruptcy acts\nof the United States, or which mortgage shall have been given to such\ntrustee under a voluntary plan of reorganization by a corporation caused\nto be organized by a bondholders' committee for the purpose of acquiring\nthe property secured by such mortgage at a sale under a judgment of\nforeclosure and sale of a prior mortgage given to secure bonds\ntheretofore issued to the public, may, with the approval of the supreme\ncourt in the county where all or part of the property affected by such\nmortgage is situate, sell, assign, discharge or satisfy such mortgage\nupon such consideration in cash as the court shall deem fair and\nequitable to the bondholders and as the court by order shall direct.\nSuch order may be made upon the application of the trustee or the holder\nof twenty-five per cent of the bonds or of the mortgagor or owners of\nthe property securing such mortgage. The court may approve a sale,\nassignment, discharge or satisfaction at such price as may appear to the\ncourt to be fair and in the best interests of the bondholders and not\nless than the cash value of said mortgage if sold at a public sale,\nunless duly acknowledged dissents thereto by holders of more than\none-third of the principal amount of the bonds then outstanding have\nbeen filed. If the application for such sale shall be consented to by\nthe holders of two-thirds of the principal amount of the bonds\noutstanding such consent shall constitute a presumption that it is fair\nand in the best interests of the bondholders that said mortgage be\nliquidated at the price fixed in such consent and the court may approve\na sale at such amount unless it shall appear to the court that such\namount is less than the cash value of said mortgage if sold at a public\nsale. If the application shall not be made by the trustee then notice\nshall be given to the trustee and in any event the order directing\nnotice to the bondholders of the application to liquidate such mortgage\nshall provide for personal service of such notice not less than thirty\ndays before the return date thereof upon not less than ten specified\nbondholders whose addresses are known to the applicant and notice by\nmail to all of the bondholders whose addresses are known and the\npublication of such notice once a week on a week day for three\nsuccessive weeks preceding the return date thereof in one newspaper of\ngeneral circulation published in the city or county where the real\nproperty securing said mortgage is located. Except as herein otherwise\nprovided all proceedings hereunder and the rights of the parties hereto,\nshall be governed by section one hundred twenty-two hereof; except that\nif the order shall become effective it shall be without prejudice to the\nright of any particular bondholder who has filed a duly acknowledged\ndissent therefrom, within the time fixed in the order, to have the court\ndetermine the cash value of the mortgage securing such bond if sold at a\npublic sale and providing for the payment or securing his ratable share\nof such amount as a condition for declaring the order effective.\n  If any provision of this section or of section one hundred twenty-two\nhereof or any clause, sentence, paragraph or any part of such section or\nthe application thereof to any person or circumstance shall be held\nunconstitutional or invalid, such decision or judgment shall not affect\nor impair the constitutionality or validity of the remainder thereof,\nbut shall be confined in its operation to the clause, sentence,\nparagraph or part thereof directly involved in such decision or\njudgment.\n