16.28 - REMEDIES OF BONDHOLDERS AND NOTEHOLDERS.
16.28 REMEDIES OF BONDHOLDERS AND NOTEHOLDERS.
1. If the authority defaults in the payment of principal or
interest on an issue of bonds or notes after they become due, whether
at maturity or upon call for redemption, and the default continues
for a period of thirty days, or if the authority fails or refuses to
comply with the provisions of this chapter, or defaults in an
agreement made with the holders of an issue of bonds or notes, the
holders of twenty-five percent in aggregate principal amount of bonds
or notes of the issue then outstanding, by instrument filed in the
office of the clerk of the county in which the principal office of
the authority is located, and proved or acknowledged in the same
manner as a deed to be recorded, may appoint a trustee to represent
the holders of the bonds or notes for the purposes provided in this
section.
2. a. The authority or any trustee appointed under the
indenture under which the bonds are issued may, and upon written
request of the holders of twenty-five percent in aggregate principal
amount of the issue of bonds or notes then outstanding shall:
(1) Enforce all rights of the bondholders or noteholders,
including the right to require the authority to carry out its
agreements with the holders and to perform its duties under this
chapter.
(2) Bring suit upon the bonds or notes.
(3) By action require the authority to account as if it were the
trustee of an express trust for the holders.
(4) By action enjoin any acts or things which are unlawful or in
violation of the rights of the holders.
(5) Declare all the bonds or notes due and payable and if all
defaults are made good then with the consent of the holders of
twenty-five percent of the aggregate principal amount of the issue of
bonds or notes then outstanding, annul the declaration and its
consequences.
b. The bondholders or noteholders, to the extent provided in
the resolution by which the bonds or notes were issued or in their
agreement with the authority, may enforce any of the remedies in
paragraph "a", subparagraphs (1) to (5) or the remedies provided
in those agreements for and on their own behalf.
3. The trustee shall also have and possess all powers necessary
or appropriate for the exercise of functions specifically set forth
or incident to the general representation of bondholders or
noteholders in the enforcement and protection of their rights.
4. Before declaring the principal of bonds or notes due and
payable, the trustee shall first give thirty days' notice in writing
to the governor, to the authority and to the attorney general of the
state.
5. The district court has jurisdiction of any action by the
trustee on behalf of bondholders or noteholders. The venue of the
action shall be in the county in which the principal office of the
authority is located. Section History: Early Form
[C77, 79, 81, § 220.28; 82 Acts, ch 1187, § 6] Section History: Recent Form
C93, § 16.28
2008 Acts, ch 1032, §130
Referred to in § 16.1, 16.26, 16.51, 16.131, 16.155, 34A.20,
260C.71