dliu1/legal-llama-raw-text huggingface dataset:
mortgage  shall  have  been  given  pursuant to a plan of reorganization
heretofore or hereafter approved and confirmed under the bankruptcy acts
of the United States, or which mortgage shall have been  given  to  such
trustee under a voluntary plan of reorganization by a corporation caused
to be organized by a bondholders' committee for the purpose of acquiring
the  property  secured  by  such  mortgage at a sale under a judgment of
foreclosure  and  sale  of  a  prior  mortgage  given  to  secure  bonds
theretofore  issued to the public, may, with the approval of the supreme
court in the county where all or part of the property affected  by  such
mortgage  is  situate,  sell, assign, discharge or satisfy such mortgage
upon such consideration in  cash  as  the  court  shall  deem  fair  and
equitable  to  the  bondholders  and as the court by order shall direct.
Such order may be made upon the application of the trustee or the holder
of twenty-five per cent of the bonds or of the mortgagor  or  owners  of
the  property  securing  such  mortgage.  The  court may approve a sale,
assignment, discharge or satisfaction at such price as may appear to the
court to be fair and in the best interests of the  bondholders  and  not
less  than  the  cash  value  of said mortgage if sold at a public sale,
unless duly acknowledged  dissents  thereto  by  holders  of  more  than
one-third  of  the  principal  amount of the bonds then outstanding have
been filed. If the application for such sale shall be  consented  to  by
the  holders  of  two-thirds  of  the  principal  amount  of  the  bonds
outstanding such consent shall constitute a presumption that it is  fair
and  in  the  best  interests  of  the bondholders that said mortgage be
liquidated at the price fixed in such consent and the court may  approve
a  sale  at  such  amount  unless it shall appear to the court that such
amount is less than the cash value of said mortgage if sold at a  public
sale.  If  the  application shall not be made by the trustee then notice
shall be given to the trustee and  in  any  event  the  order  directing
notice  to the bondholders of the application to liquidate such mortgage
shall provide for personal service of such notice not less  than  thirty
days  before  the  return  date thereof upon not less than ten specified
bondholders whose addresses are known to the  applicant  and  notice  by
mail  to  all  of  the  bondholders  whose  addresses  are known and the
publication of such  notice  once  a  week  on  a  week  day  for  three
successive  weeks  preceding the return date thereof in one newspaper of
general circulation published in the  city  or  county  where  the  real
property  securing  said mortgage is located. Except as herein otherwise
provided all proceedings hereunder and the rights of the parties hereto,
shall be governed by section one hundred twenty-two hereof; except  that
if the order shall become effective it shall be without prejudice to the
right  of  any  particular  bondholder who has filed a duly acknowledged
dissent therefrom, within the time fixed in the order, to have the court
determine the cash value of the mortgage securing such bond if sold at a
public sale and providing for the payment or securing his ratable  share
of such amount as a condition for declaring the order effective.
If  any provision of this section or of section one hundred twenty-two
hereof or any clause, sentence, paragraph or any part of such section or
the application thereof to any person  or  circumstance  shall  be  held
unconstitutional  or invalid, such decision or judgment shall not affect
or impair the constitutionality or validity of  the  remainder  thereof,
but  shall  be  confined  in  its  operation  to  the  clause, sentence,
paragraph  or  part  thereof  directly  involved  in  such  decision  or
§  121.  Reorganization  of  property covered by trust mortgage.  Such
banking corporation, under the direction of the court in the foreclosure
action may, and if directed by the court shall, purchase or cause to  be
purchased  said  real  property,  pursuant to a reorganization plan, and
cause to be  formed  a  domestic  business  corporation,  or  a  foreign
corporation  providing  such  foreign  corporation  is  authorized to do
business within this state,  or  utilize  any  other  such  corporation,
providing  the  corporation so formed or utilized shall have provided in
its certificate of incorporation the restriction set  forth  in  section
one hundred eleven of decedent estate law, and shall thereupon grant and
release  said  property to such new corporation and its assigns forever,
or by assignment of its bid to such new corporation, or otherwise, cause
the referee's deed in foreclosure to be executed and delivered  directly
to  such  new corporation granting and releasing such property to it and
its assigns forever,  in  exchange  for  the  stocks,  bonds  and  other
securities of such new corporation except such of said securities as may
be  reserved  for  the  adjustment  of  liens  and  claims  against said
property, or for other purposes as specified in the plan, including  any
provision  made  in a plan approved by the court and thereafter becoming
effective  as  provided  in  section  one  hundred  twenty-two  for  any
interest,  junior  or  subordinate to the mortgage foreclosed; provided,
however, that such new corporation shall be authorized to raise money by
mortgage, pledge, borrowing, sale of  securities  or  otherwise  to  the
extent  which  may  be  set  forth  in  the  plan of reorganization. The
trustee, upon receiving such securities and any cash available from  the
new  corporation,  shall  distribute  the  same  and  any other funds or
property constituting part of the trust estate,  ratably  amongst  those
parties  interested  in  such  mortgage, deed of trust or indenture less
such trustee's proper expenses and charges in connection therewith;  and
thereupon  the  trustee  upon the filing and approval of its accounts in
the foreclosure action and upon assigning to such  new  corporation  any
deficiency  judgment  and  any guarantees and insurance policies held by
the trustee and any claim for waste or otherwise in connection with  the
mortgage  estate,  shall  be  discharged  of  any  further obligation or
liability under such mortgage or indenture or otherwise. Nothing  herein
contained  shall  affect or impair the liability of any guarantor or any
right or remedy existing in  favor  of  any  holders  of  bonds,  notes,
certificates  or other securities which are secured by or participate in
such mortgages, deeds of trust or indentures.
§   122.  Procedure  of  reorganization  and  expenses  in  connection
therewith.  The reorganization plan may be presented to the  court  with
the  complaint  for  foreclosure, or thereafter by the trustee or by any
persons owning or representing twenty-five per centum of  the  principal
amount  of  the  securities  covered  by such mortgage, deed of trust or
indenture at any time prior to the  foreclosure  sale.  The  plan  shall
contain  a  statement  of the minimum and maximum sums which the trustee
shall bid for the property, which sums may be varied by the  court  upon
its  approval of the plan; and the trustee shall not incur any liability
by reason of its failure to bid more than said maximum sum. The  trustee
shall   not   be  liable  for  any  action  in  executing  the  plan  of
reorganization approved by the court except for its  wilful  misconduct,
fraud,  bad faith or gross negligence. Hearings upon such reorganization
plan  shall  be  at  such  time  and  place  and  upon  such  notice  by
publication, mailing or otherwise, as the court shall fix in an order to
show  cause  why  the  plan  should not be approved. The trustee and any
person beneficially interested  in  said  mortgage,  deed  of  trust  or
indenture,  and  any  person  whose  rights  may  be  affected  by  such
reorganization, may appear upon the return day  of  the  order  to  show
cause  or  at  any  adjournment  thereof,  and  submit objections to and
modifications of the plan or an alternate plan, and the court shall hear
the parties by affidavit or summarily or otherwise, as in its discretion
it  may  direct,  and  thereupon   finally   determine   the   plan   of
reorganization  and fix the time and method for persons affected by such
reorganization to become parties thereto. Where neither the mortgage  or
indenture,   nor  the  statute  relating  to  the  particular  class  of
securities nor  any  other  statute,  authorizes  the  purchase  of  the
property  on behalf of all the holders of bonds or certificates of parts
or shares, then if any holder, within twenty days after the approval  of
the  plan,  shall  file  with  the  court  a  duly  acknowledged dissent
therefrom, the court shall determine the cash value of the  property  as
if sold at a public sale and such dissenting holder shall be entitled to
be  secured  for  his  ratable  share  of such amount as a condition for
declaring the plan effective. In all other cases the reorganization plan
shall be deemed binding on all  holders  of  bonds  or  certificates  of
shares or parts unless within twenty days after the approval of the plan
one-third  in  principal  sum  of such holders shall file with the court
duly acknowledged dissents therefrom; in which event  the  plan  may  be
abandoned or may be further modified as the court shall direct, with the
same  right of dissent as aforesaid as to any subsequently amended plan.
Notice  of  the  court's  approval  of  the  plan  shall  be  given   by
publication,  mailing  or otherwise as the court may in particular cases
or by general rule direct. Any person  aggrieved  by  any  determination
hereunder  shall have such rights of appeal as are granted to a party to
a special proceeding. The expenses and compensation of the  trustee  and
of  any  committee  or  person  who  shall  have  submitted  a  plan  of
reorganization or modifications thereof shall be fixed at  such  sum  as
the court may deem reasonable and shall be chargeable as a lien upon the
property  or collectible through their assumption by the new corporation
or in such other manner as the court may approve.   All proceedings  and
appeals  in  respect  to the plan of reorganization shall be entitled to
preference over all other civil causes  next  in  order  to  actions  or
special  proceedings  in  which  the people of the state or any officer,
board or political subdivision thereof shall be a party.
Search Word or Phrase
§   122-a.   Modification   of   trust   mortgages   given   in  prior
re-organizations. Any such banking corporation or any individual  acting
as  trustee  in respect to any mortgage, deed of trust or indenture upon
real property, or any leasehold interest therein, against  which  bonds,
certificates,  shares or any other evidence of interests therein (herein
called debts) shall have been issued to the public, and which mortgage
shall have been given to such trustee by a corporation  organized  under
section   one   hundred   twenty-one  hereof,  pursuant  to  a  plan  of
reorganization approved by the court and which  became  effective  under
section one hundred twenty-two hereof, or which mortgage shall have been
given to or is held by such trustee pursuant to, or by reason of, a plan
of  reorganization  heretofore or hereafter approved and confirmed under
the bankruptcy acts of the United States or which  mortgage  shall  have
been given to such trustee under a voluntary plan of reorganization by a
corporation  caused  to be organized by a bondholders' committee for the
purpose of acquiring the property secured by such mortgage, may, without
foreclosure of such mortgage,  and  whether  or  not  a  default  exists
thereunder, present to the supreme court in the county where all or part
of  the  real property affected by such mortgage is situated, a plan for
the reorganization of such mortgage, deed of  trust  or  indenture.  The
plan  of  reorganization  may  provide  for:  (1)  the  extension of the
maturity of the mortgage, deed of  trust  or  indenture  and  the  debts
secured  thereby;  (2)  the modification of the provisions for interest,
amortization or sinking funds; and (3) such other changes, modifications
or amendments as may be fair and feasible and for the best interests  of
the  security holders. Such plan may likewise be presented by holders or
representatives of twenty-five per centum in principal  amount  of  such
securities.  Such  plan  may cover one or more mortgages with respect to
said property. If no default shall exist in the payment of principal  or
interest, such plan may be presented by the mortgagor or by the owner of
the  property covered by such mortgage. Hearing upon such reorganization
publication,  mailing or otherwise as the court shall fix in an order to
show cause why the plan  should  not  be  approved.  No  plan  shall  be
approved unless the court, after such hearing shall determine that it is
fair,  feasible  and for the best interests of the security holders. The
affirmative consent of the holders of two-thirds of the principal amount
of the outstanding securities shall constitute a  presumption  that  the
plan  is  fair,  feasible  and  for  the  best interests of the security
holders. All proceedings hereunder and the rights of the parties hereto,
including  the  hearing,  the  final  order  determining  the  plan   of
reorganization embodying such modifications, the time and method for the
persons  affected by such plan becoming parties thereto and the right of
appeal from  any  order,  shall  be  governed  by  section  one  hundred
twenty-two  hereof;  except  that  if  the  reorganization  shall become
effective it shall be without prejudice to the right of  any  particular
holder  of  such securities who has duly dissented therefrom to have the
court determine the cash value of such securities as he may  have  owned
on  or before the date of the presentation of the plan of reorganization
pursuant to this section, and providing for the payment or securing  his
ratable  share  of  such  amount  as  a condition for declaring the plan
effective. Upon the order becoming effective the plan shall  be  binding
upon all the security holders.
§ 123. Preserving existing rights. Nothing in this act shall be deemed
to  prevent  any  bondholder or committee of bondholders from bidding at
the foreclosure sale and in case he  or  they  should  be  a  successful
bidder,  from  applying upon the purchase price the bonds held by him or
them at the amount distributable thereon and reorganizing  the  property
so  purchased  in  any manner which was lawful prior to the enactment of
this act, nor to impair any previously existing right of a trustee so to
purchase and pay for the property, or  to  preclude  any  trustee  which
shall  have  purchased such property from submitting to the court a plan
for its reorganization. The court may provide for the  qualification  of
bidders  other  than  the  trustee by requiring them to deposit with the
officer conducting the sale in advance of bidding up to ten  per  centum
of  the  amount  of their bid in cash or in bonds taken at the principal
amount  thereof.  In  any  action  now  or  hereafter  pending  for  the
foreclosure  of  any  such mortgage or indenture, the property shall, on
application of the trustee, be sold subject to the lien  of  any  taxes,
assessments  and  water rates, any prior lien, or to any liens which may
thereafter be established, which are the subject of  litigation  pending
at the time of the sale, provided a brief statement thereof is contained
in the notice of sale.
ARTICLE 4-A
TRUST INDENTURES AND INTERESTS THEREIN
Section 124.   Purpose and application of article.
125.   Definitions.
126.   Trust indentures.
127.   Restrictions on trustees.
128.   Minimum bid of trustee at sale on foreclosure to be fixed
by court.
129.   Deposit agreements.
130-a. Restrictions on committees.
130-b. Managing agents and management companies.
130-c. Voting trustees and voting trust agreements.
130-d. Fees and allowances.
130-e. Removal of trustees, committees or depositaries.
130-f. Actions  for  accounting  by  minority  groups;  expenses
130-g. Violations and penalties.
130-h. Construction of article.
130-i. Separability.
130-j. Right to appeal.
130-k. Exemptions  from  restrictions  on  trustees  and   trust
Indentures.
§  124.  Purpose  and application of article. It is the purpose of the
legislature, in enacting this article, to provide for the regulation and
supervision of the appointment,  creation,  agreements,  acts,  conduct,
practices   and   proceedings   of   trustees,  bondholders'  protective
committees, depositaries,  management  companies,  voting  trustees  and
other  persons  administering, holding in custody or otherwise concerned
with real estate mortgages and interests therein to the  end  that  such
interests  will  be  properly  conserved,  administered  and  ultimately
liquidated in the public interest. This  article,  except  as  otherwise
expressly  provided, shall apply, to the extent that the state has power
to  provide  therefor,  to  all  mortgage  investments,  as  hereinafter
defined,   where  the  property  constituting  the  underlying  security
therefor, or any part thereof, is located within the state or where  the
trustee,  committee,  depositary,  management company, voting trustee or
other person administering, holding in custody, or  otherwise  concerned
with such investments has an office for the transaction of business with
respect  thereto  within  the  state  or  has  obtained  authority to do
business in this state.
§  125.  Definitions.  As  used  in  this  article, unless the context
requires otherwise:
1. Mortgage investments shall mean and include any  and  all  shares
and  interests,  heretofore or hereafter acquired, in an issue of bonds,
notes or other evidence of indebtedness  of  individuals,  partnerships,
associations  or  corporations, held by more than one person and secured
by a mortgage or mortgages upon real property, or by a deed or deeds  of
trust,  trust  indenture  or indentures or other evidence of interest in
real property, the payment of which is not guaranteed by any  title  and
mortgage  guaranty  corporation  or investment company and shall include
certificates of deposit  issued  by  or  on  behalf  of  a  bondholders'
protective committee or similar group and also any bonds, notes or other
evidences  of  indebtedness  taken  in  lieu  of  such  real property by
foreclosure or otherwise, provided, however, that it shall  not  include
industrial   securities.  The  term  industrial  securities  shall  be
construed to mean the bonds, debentures, notes  or  other  evidences  of
indebtedness  of individuals, partnerships, associations or corporations
not engaged in the business  of  owning,  improving  or  operating  real
property  but  whose  ownership  of  such  real property shall be merely
incidental to the operation and conduct of its business and  which  real
property  shall  be  used as incidental and additional security for such
bonds, notes, debentures or other evidences of indebtedness.
2. Bondholder shall mean and include any person,  firm,  association
or corporation owning or holding a mortgage investment.
3.  Trustee  shall mean and include any person, firm, association or
corporation named, appointed or designated as such in any deed of trust,
trust indenture or other similar instrument or  any  successor  of  such
trustee.
4.  Committee  shall  mean and include a person or group of persons,
however known or designated, appointed by agreement, assignment,  proxy,
consent,  authorization,  power of attorney, or other similar instrument
to act as an agency to receive and hold mortgage  investments  deposited
by  bondholders  and  to administer or do any act in respect to the same
for the bondholders.
5. Deposit agreement shall include any agreement, assignment, proxy,
consent, authorization, power of attorney or  other  similar  instrument
whereby  a  mortgage  investment  is  deposited  with  or  assigned to a
6. Depositary shall mean and include any person,  firm,  association
or  corporation  designated  in  any  trust indenture, deed of trust, or
deposit  agreement  as  the  custodian   or   depositary   of   mortgage
7.  Property  shall mean and include all of the real property or any
incidental personal property constituting the  underlying  security  for
mortgage investments.
8. Court, unless some other court has jurisdiction over the property
or  a  plan  of reorganization therefor, shall mean the supreme court of
the state of New York in the county in which the property or  the  major
portion  thereof  is located, or, if the property be located outside the
state, in the county of the state in which  the  committee,  trustee  or
other  person  dealing  with  the mortgage investment has or proposes to
have his principal office for the transaction of business  with  respect
to such mortgage investment.
§  126.  Trust  indentures.  No trustee shall hereafter accept a trust
under any trust indenture or mortgage within the contemplation  of  this
article  or act as trustee thereunder unless the instrument creating the
trust shall contain the following provisions, among others, which confer
the following powers and impose the following duties upon the trustees:
1. In the case of an event of default (as such term is defined in such
instrument), to exercise such of the rights and  powers  vested  in  the
trustee by such instrument, and to use the same degree of care and skill
in  their  exercise  as  a  prudent  man would exercise or use under the
circumstances in the conduct of his own affairs.
2. In  considering  what  actions  are  or  are  not  prudent  in  the
circumstances, to consider whether or not:
(a) to take such action as may be necessary or proper to sequester the
rents and income of the property;
(b)  to  procure from the owner of the property an assignment of rents
andor a consent to enter into possession of the property and to collect
the rents therefrom;
(c) to apply to the court for the appointment of  a  receiver  of  the
(d)  to  declare  due  and  payable  forthwith  any  principal  amount
remaining due and unpaid and commence an action of foreclosure;
(e) to apply the moneys received as rents and income from the property
as well as moneys received by the trustee from  any  receiver  appointed
for such property in his discretion, to the maintenance and operation of
such  property, the payment of taxes, water rents and assessments levied
thereon and any arrears thereof, to the payment of underlying liens, and
to the creation and maintenance of a reserve or sinking fund.
3. If the trustee can  obtain  the  information  without  unreasonable
effort  or  expense,  to  render  annually  to  bondholders,  after  the
occurrence of a default, unless such  default  be  previously  cured,  a
summarized  statement  of income and expenditures in connection with the
4. To distribute the proceeds of any sale or other disposition of  the
property  ratably among the bondholders, subject to applicable mandatory
provisions of law.
5. To permit the obligor or other person in possession or  control  of
the  property,  or  his successors in interest, to be free to select the
insurance broker or agent through whom any insurance of any kind  is  to
be  placed  or written on any property affected or covered by a mortgage
held by such trustee.
§ 127. Restrictions on trustees. 1. No trustee shall accept a trust or
act as trustee under a trust mortgage affecting any property in which he
or  any of the officers or directors of the trustee shall have, directly
or indirectly, any financial interest.
2. No trustee nor any officer  or  director  of  a  trustee,  nor  any
employee  of  any  company  which  is  a subsidiary of, controlled by or
affiliated with the trustee shall, either directly or indirectly, act as
insurance broker or agent in connection with the placing or  writing  of
any  insurance  of  any  kind  on  any property affected or covered by a
mortgage held by such trustee under a trust indenture, deed of trust, or
other  similar  instrument,  nor  shall  such  trustee  be  an  officer,