52:18A-67. Remedies and statutory trustees

(a) The provisions of this section shall be applicable to an issue of bonds authorized or issued by the Authority only if the resolution of the Authority authorizing or providing for the issuance of such bonds shall provide in substance that the holders of the bonds of such issue shall be entitled to the benefits and be subject to the provisions of this section.

(b) In the event that there shall be a default in the payment of principal of or interest on any bonds of such issue after the same shall become due, whether at maturity or upon call for redemption, and such default shall continue for a period of thirty days, or in the event that the Authority shall fail or refuse to comply with the provisions of this act or shall fail or refuse to carry out and perform the terms of any contract or covenant with or for the benefit of the holders of any of such bonds, and such failure or refusal shall continue for a period of thirty days after written notice by any holder of bonds of such issue or by a trustee for bondholders to the Authority of its existence and nature, the holders of twenty-five per centum (25%) in aggregate principal amount of the bonds of such issue then outstanding by instrument or instruments filed in the office of the Secretary of State and proved or acknowledged in the same manner as a deed to be recorded, may appoint a statutory trustee to represent the holders of the bonds of such issue for the purposes provided in this section.

(c) Such statutory trustee may and upon written request of the holders of twenty-five per centum (25%) in aggregate principal amount of the bonds of such issue then outstanding shall, in his or its own name:

(i) by civil action in lieu of prerogative writ or by any other civil action or suit, enforce all rights of the holders of such bonds, including the right to require the Authority to charge and collect rents and other revenues adequate to carry out any contract as to, or pledge of, such rents and revenues, and to require the Authority to carry out and perform the terms of any contract or covenant with or for the benefit of the holders of such bonds or its duties under this act;

(ii) bring action or suit upon all or any part of such bonds or interest coupons or claims appurtenant thereto;

(iii) by action or suit require the Authority 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 covenants of the Authority or the rights of the holders of such bonds; or

(v) declare all such bonds due and payable, whether or not in advance of maturity, upon thirty days' prior notice in writing to the Authority and if all defaults shall be made good, then with the consent of the holders of twenty-five per centum (25%) of the principal amount of such bonds then outstanding, to annual such declaration and its consequences.

(d) Before declaring the principal of all such bonds due and payable the trustee shall first give thirty days' notice in writing to the Authority.

(e) Any such trustee, whether or not the issue of bonds represented by such trustee has been declared due and payable, shall be entitled as of right to the appointment of a receiver of any part or parts of the project the rents or other revenues of which are pledged for the security of the bonds of such issue and such receiver may enter and take possession of such part or parts of the project and subject to any pledge or agreement with bondholders shall take possession of all moneys and other property derived from or applicable to the construction, operation, maintenance and reconstruction of such part or parts of the project and proceed with any construction thereon which the Authority is under obligation to do and to operate, maintain and reconstruct such part or parts of the project and collect and receive all rents and other revenues thereafter arising therefrom subject to any pledge thereof or agreement with bondholders relating thereto and perform the public duties and carry out the agreements and obligations of the Authority under the direction of the court. In any suit, action or proceeding by the trustee the fees, counsel fees and expenses of the trustee and of the receiver, if any, shall constitute taxable disbursements and all costs and disbursements allowed by the court shall be a first charge on any rents and other revenues derived from such project.

(f) Such trustee shall, in addition to the foregoing, have and possess all of the powers necessary or appropriate for the exercise of any functions specifically set forth herein or incident to the general representation of bondholders in the enforcement and protection of their rights.

L.1950, c. 255, p. 889, s. 18.