2023 Laws of Puerto Rico › TITLE TWENTY-SEVEN - Public Service (§§ 1 — 2641) › PART II - Communications (§§ 265 — 539) › Chapter 25 - Telephone Authority (§§ 401 — 425) › § 417 - Default in payment of bonds; receivership

(a) In the event that the Authority shall default in the payment of the principal of, or interest on, any of its 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 (30) days, or in the event that the Authority shall default in any agreement made with the bondholders, any holder or bondholders (subject to any contractual limitation as to a specific percentage of such holders), or trustee thereof, shall have the right to apply in an appropriate judicial proceeding to any court of competent jurisdiction in Puerto Rico for the appointment of a receiver of the System or parts thereof, the revenues of which are pledged to the payment of the bonds so in default, whether or not all the bonds have been declared due and payable and whether or not such holder, or trustee thereof, is seeking or has sought to enforce any other right or to exercise any remedy in connection with such bonds. Upon such application the court may appoint, and if the application is made by the holders of twenty-five per cent (25%) in principal amount of such bonds then outstanding, or by any trustee for holders of bonds in such principal amount, shall appoint a receiver of such System.
(b) The receiver so appointed shall forthwith, directly or through his/her agents and attorneys, enter into and upon and take possession of such System and each and every part thereof, and may exclude the Authority, its officers, agents, and employees and all persons claiming under them, wholly therefrom and shall have, hold, use, operate, manage, and control the same and each and every part thereof, and, in the name of the Authority or otherwise, as the receiver may deem best, shall exercise all the rights and powers of the Authority with respect to such System as the Authority itself might do. Such receiver shall maintain, restore, insure, and keep insured, such System and from time to time shall make all such necessary or proper repairs as such receiver may deem expedient, shall establish, levy, maintain, and collect such rates, fees, rentals, and other charges in connection with such System as such receiver may deem necessary, proper and reasonable, and shall collect and receive all revenues and deposit the same in a separate account and apply the revenues so collected and received in such manner as the court shall direct.
(c) Whenever the full amount due upon all bonds and the interest thereon, and upon any other notes having a charge, lien, or encumbrance on the revenues of such System and under any of the terms of any covenants or agreements with bondholders shall have been paid or deposited as provided therein, and all defaults in consequence of which a receiver may be appointed shall have been cured and made good, the court may, in its discretion and after such notice and public hearing as it deems reasonable and proper, direct the receiver to surrender possession of such System to the Authority, and the same right of the bondholders to obtain the appointment of a receiver to exist upon any subsequent default as hereinabove provided.
(d) Such receiver shall act, in the performance of the powers hereinabove conferred upon him, under the direction and supervision of the court and shall at all times be subject to the orders and decrees of the court and may be removed thereby. Nothing herein contained shall limit or restrict the jurisdiction of the court to enter such other and further orders and decrees as such court may deem necessary or appropriate for the exercise by the receiver of any functions specifically set forth in this chapter.
(e) Notwithstanding anything in this section to the contrary, such receiver shall have no power to sell, assign, mortgage, or otherwise dispose of any assets of whatever kind or character belonging to the Authority and useful for such System, but the powers of any such receiver shall be limited to the operation and maintenance of such System, and the collection and application of the revenues therefrom, and the court shall not have jurisdiction to enter any order or decree requiring or permitting said receiver to sell, mortgage, or otherwise dispose of any such assets.
History —May 6, 1974, No. 25, Part 1, p. 136, § 17; Sept. 12, 1996, No. 215, § 17; renumbered as § 13 on June 24, 1998, No. 94, § 17.