N.Y. Tobacco Settlement Financing Corporation Act § 8

Current through 2024 NY Law Chapter 424

Section 8 - Remedies of bondholders

1.Subject to the provisions of section six of this act, in the event that the corporation shall default in the payment of principal of, or interest on, or sinking fund payment on, any issue of bonds after the same shall become due, whether at maturity or upon call for redemption, or in the event that the corporation or the state shall default in any agreement made with the holders of any issue of bonds, the holders of twenty-five per centum in aggregate principal amount of the bonds of such issue then outstanding, by instrument or instruments filed in the office of the clerk of the county of Albany and proved or acknowledged in the same manner as a deed to be recorded, may appoint a trustee to represent the holders of such bonds for the purposes herein provided.

2.Such trustee, or any trustee appointed under this act, may, and upon written request of the holders of twenty-five per centum in principal amount of such bonds then outstanding shall, in his or its own name:

(i) by suit, action or proceeding in accordance with the civil practice law and rules, enforce all rights of the bondholders, including the right to require the corporation to carry out any agreement with such holders and to perform its duties under this act;

(ii) bring suit upon such bonds;

(iii) by action or suit, require the corporation to account as if it were the trustee of an express trust for the holders of such bonds;

(iv) by action or suit, enjoin any acts or things which may be unlawful or in violation of the rights of the holders of such bonds; and

(v) declare all such bonds due and payable, and if all defaults shall be made good, then, with the consent of the holders of twenty-five per centum of the principal amount of such bonds then outstanding, annul such declaration and its consequences, provided, however, that nothing herein shall preclude the corporation from agreeing that consent of the provider of an ancillary bond facility is required for an acceleration of related bonds in the event of a default other than a failure to pay principal of or interest on the bonds when due.

3.The supreme court shall have jurisdiction of any suit, action or proceeding by the trustee on behalf of such bondholders. The venue of any such suit, action or proceeding shall be laid in the county of Albany.

4.Before declaring the principal of bonds due and payable, the trustee shall first give thirty days notice in writing to the corporation.

N.Y. Tobacco Settlement Financing Corporation Act § 8