7-82-505 - Lien Default Pledges or security interests Construction.
7-82-505. Lien Default Pledges or security interests Construction.
(a) There shall be and there is created a statutory lien in the nature of a mortgage lien upon any system or systems acquired or constructed in accordance with this chapter, including all extensions and improvements to the system or systems, or combinations of extensions and improvements subsequently made, which lien shall be in favor of the holder or holders of any bonds issued pursuant to this chapter, and all such property shall remain subject to such statutory lien until the payment in full of the principal of and interest on the bonds. Any holder of such bonds or any of the coupons representing interest on the bonds may, either at law or in equity, by suit, action, mandamus, or other proceeding, in any court of competent jurisdiction, protect and enforce such statutory lien and compel performance of all duties required by this chapter, including the making and collection of sufficient rates for the service or services, the proper accounting for the collections, and the performance of any duties required by covenants with the holders of any bond issued in accordance with this chapter.
(b) If any default be made in the payment of the principal of or interest on such bonds, any court having jurisdiction of the action may appoint a receiver to administer the district, and the system or systems, with power to charge and collect rates sufficient to provide for the payment of all bonds and obligations outstanding against the system or systems and for the payment of operating expenses, and to apply the income and revenues of the bonds, in conformity with the provisions of this chapter, and any covenants with bondholders.
(c) (1) Any pledge of, or security interest in, the revenues, fees, rents, tolls or other charges received or receivable by any utility district to secure the payment of any bonds of such utility district, and the interest on the bonds, shall be valid and binding from the time when the pledge or security interest is made or granted; the revenues, fees, rents, tolls or other charges so pledged and thereafter received by the utility district or on behalf of any bondholders, together with any tangible property subjected to a security interest by the utility district, shall be subject to such lien as the resolution or other document creating such pledge in favor of the holder or holders of such bonds shall provide. Neither the resolution nor any other instrument by which any such pledge or security interest or any lien on any of the property of the utility district is created need be recorded.
(2) The provisions of this subsection (c) shall be in addition to and supplemental to all other provisions of other laws of Tennessee; provided, that wherever the application of the provisions of this subsection (c) conflict with the application of such other provisions, the provisions of this subsection (c) shall prevail.
[Acts 1937, ch. 248, § 11; C. Supp. 1950, § 3695.37 (Williams, 3695.36); T.C.A. (orig. ed.), § 6-2623; Acts 1982, ch. 547, §§ 1, 2.]