Sec. 3-76q. Default by state, remedies of municipalities, holders.
Sec. 3-76q. Default by state, remedies of municipalities, holders. (a) If the state
defaults in the payment of principal or interest on any issue of special obligation bonds
after they become due, whether at maturity or upon call for redemption, and the default
continues for thirty days, or if the state fails or refuses to comply with this part or defaults
in any agreement made with a municipality or with the holders of any issue of bonds,
and such failure or refusal continues thirty days after written notice thereof, the holders
of twenty-five per centum in aggregate principal amount of the outstanding bonds of
that issue, by instrument filed in the office of the Secretary of State and executed in the
same manner as a deed to be recorded, subject to the provisions of subsection (r) of
section 3-76g, may appoint a trustee to represent the holders of those bonds for the
purposes herein provided and the municipality may proceed by mandamus or other
appropriate suit, action or proceeding at law or in equity to enforce its rights.
(b) A trustee appointed under this section may, and shall in his or its name, upon
written request of the holders of twenty-five per centum in principal amount of outstanding special obligation bonds: (1) By mandamus or other suit, action or proceeding at
law or in equity, enforce all rights of bondholders, including the right to require the
state to collect the trust receipts, and to collect interest and amortization payments on
municipal refunding bonds held by it adequate to carry out any agreement as to, or
pledge of, the trust receipts and of the interest and amortization payments, and to require
the state to carry out any other agreements with the holders of such bonds and to perform
its duties under this part; (2) bring suit upon all or any part of the bonds or interest
coupons appertaining thereto; (3) by action or suit, require the state to account as if it
were the trustee of any express trust for the holders of the bonds; (4) by action or suit
in equity enjoin anything which may be unlawful or in violation of the rights of the
holders of the bonds; (5) declare all the bonds due and payable, and if all defaults are
made good, then with the consent of the holders of twenty-five per centum of the principal amount of the outstanding bonds, annul the declaration and its consequences; (6)
the trustee shall in addition to the foregoing have all the powers necessary 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.
(c) Before declaring the principal of bonds due and payable, the trustee must first
give thirty days' notice in writing to the Governor, the State Treasurer and the Attorney
General of the state.
(P.A. 73-591, S. 17, 21.)