2023 New York Laws › PVH - Private Housing Finance › Article 2 - Limited-Profit Housing Companies › 35 - Voluntary Dissolution.

§  35.  Voluntary dissolution. 1. A company aided by a loan made prior
to May first, nineteen hundred fifty-nine, may voluntarily be dissolved,
with the consent of the commissioner or of the  supervising  agency,  as
the  case  may  be,  not less than thirty-five years after the occupancy
date upon the payment in full of the remaining balance of principal  and
interest  due  and  unpaid  upon  the  mortgage  held  by the state or a
municipality pursuant to this article and payment to the municipality of
a sum equal to the total of all accrued taxes for  which  tax  exemption
was  granted  and  received  pursuant  to  section  thirty-three of this
article, provided however that such payment of accrued  taxes  shall  be
waived  if a company is voluntarily dissolved subsequent to the original
maturity date of any mortgage  held  by  the  state  or  a  municipality
pursuant to this article.
2.  A  company  aided by a loan made after May first, nineteen hundred
fifty-nine, may voluntarily be dissolved, without  the  consent  of  the
commissioner  or of the supervising agency, as the case may be, not less
than twenty years after the occupancy date upon the payment in  full  of
the  remaining balance of principal and interest due and unpaid upon the
mortgage or mortgages and of any and all expenses incurred in  effecting
such voluntary dissolution.
3.  Upon such dissolution, title to the project may be conveyed in fee
to the owner or owners of  its  capital  stock  or  to  any  corporation
designated  by  it  or  them  for  the  purpose,  or  the company may be
reconstituted pursuant to appropriate laws relating to the formation and
conduct of corporations, provided,  however,  that  prior  to  any  such
dissolution  and  conveyance or reconstitution, payment shall be made of
all current operating expenses,  taxes,  indebtedness  and  all  accrued
interest  thereon  and  the  par  value  of and accrued dividends on the
outstanding stock of such company. If after making  such  payments,  and
after  conveyance  of  the project, a surplus remains in the treasury of
the company, such surplus, except in the case of a project  aided  by  a
state loan made after May first, nineteen hundred fifty-nine, shall upon
dissolution,  be  paid  into  the general fund of the municipality which
granted tax exemption. After such dissolution and  conveyance,  or  such
reconstitution,  the  provisions  of  this  article  shall become and be
inapplicable to any such project and its owner or  owners  and  any  tax
exemption  granted  with  respect  to  such  project pursuant to section
thirty-three hereof shall cease and terminate.
4. (a) Notwithstanding any contrary provision of  subdivision  one  or
three  of  this  section  or  of  any other law or local law, consent to
dissolve a company aided by a loan made prior  to  May  first,  nineteen
hundred fifty-nine shall be given by the commissioner or the supervising
agency,  as  the  case  may  be,  thirty-five  years  or  more after the
occupancy date, provided that:
(i) such company's project or projects is or are located in a city  of
less than one million and more than three hundred thousand persons;
(ii)  the dissolution of such company is part of a refinancing plan to
continue the operation of the existing project or  projects  under  this
chapter  by  a  new company organized pursuant to the provisions of this
article in corporate, partnership, or individual ownership form  as  the
existing stockholders shall agree;
(iii)  if  the  refinancing  is  done by a new first mortgage, the new
company shall be bound to pay from the proceeds of such refinancing  the
remaining balance of the principal and interest on the original mortgage
and  any interest due to debenture holders if such interest cannot first
be paid out of the original company's surplus or  reserves;  or  if  the
refinancing is done by a second mortgage, the new company shall be bound
to  pay  from  the  proceeds  of  such  refinancing  the interest due to

debenture holders if such interest cannot  first  be  paid  out  of  the
original company's surplus or reserves; and
(iv)  the  new company shall be bound to use at least fifty percent of
the net proceeds, which remain from such refinancing after  having  paid
the  legal  fees  and  development  costs  connected therewith and after
having  made  the  payments  required  by  subparagraph  (iii)  of  this
paragraph,  to  finance  the  costs of refurbishing the existing housing
units of the project,  or  to  build  and  operate  under  this  chapter
additional  housing  units  for persons of low or moderate income or for
disabled persons, within the  same  municipality  wherein  the  original
project  is  or projects are located, or to do both such refurbishing of
existing units and such building and operating of such additional units;
any portion of the net proceeds remaining after utilization of at  least
fifty percent thereof for the foregoing purposes shall be distributed or
used as the stockholders, partners or sole owner (as the case may be) of
the new company shall decide.
(b)  The  New  York  state housing finance agency and the state of New
York mortgage agency are hereby authorized and empowered to finance such
first or second mortgages for the foregoing  refinancing  purposes  upon
such terms and conditions as each such agency deems appropriate.
(c)  A  company which is voluntarily dissolved in accordance with this
subdivision shall not be required  to  pay  the  taxes  referred  to  in
subdivision  one  of  this  section  nor  any  surplus  remaining in its
treasury as referred to in subdivision three  of  this  section  to  the
municipality  which  grants  the  tax  abatement  for  such  project  or
projects, but  instead,  such  surplus  and  all  reserve  accounts  and
debenture  rights,  titles,  interests,  contracts, accounts receivable,
accounts payable, and all other assets and liabilities of the  dissolved
company  shall  be  transferred  to  the  new company organized for such
refinancing purposes pursuant to such refinancing  plan,  and  such  new
company  shall  be  considered for all the purposes of this chapter as a
company aided by a loan made subsequent to May first,  nineteen  hundred
fifty-nine,  with  the  first date of occupancy deemed to be the date of
the closing of the new first or the second mortgage entered into as part
of the refinancing plan described in subparagraphs (ii), (iii) and  (iv)
of  paragraph  (a) of this subdivision; and any tax abatement granted by
such municipality for such project or  projects  shall  continue  to  be
applied  unless  or until such municipality shall act to extend, modify,
enlarge or remove such tax abatement.