175.19 - REMEDIES OF BONDHOLDERS AND NOTEHOLDERS.
175.19 REMEDIES OF BONDHOLDERS AND NOTEHOLDERS.
1. If the authority defaults in the payment of principal or
interest on an issue of bonds or notes 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, but 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 may, to the extent provided
in the resolution to which the bonds or notes were issued or in its
agreement with the authority, enforce any of the remedies in
paragraph "a", subparagraphs (1) through (5), or the remedies
provided in such proceedings or agreements for and on their own
behalf.
3. The trustee shall also have 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
[C81, § 175.19; 81 Acts, ch 68, § 5] Section History: Recent Form
2008 Acts, ch 1031, §39
Referred to in § 175.13A, 175.33, 175.34