21-280 - Special remedies of bondholders.
§ 21-280. Special remedies of bondholders.
(a) The provisions of this section shall be applicable to a series of bondsof a commission only if the resolution or resolutions authorizing such seriesof bonds shall provide in substance that the holders of the bonds of suchseries shall be entitled to all the benefits, and be subject to theprovisions of this section.
(b) In the event that the commission shall default in the payment of theprincipal of or interest on any bonds of such series after the same shallbecome due, whether at maturity or upon call for redemption, and such defaultshall continue for a period of thirty days, or in the event that thecommission shall fail or refuse to comply with the provisions of this chapterrelating to or affecting the payment or security of such bonds or thecollection of fees, rents or charges, or other revenues therefor, or shallfail or refuse to carry out and perform the terms of any contract with theholders of any of such bonds, and such failure or refusal shall continue fora period of thirty days after written notice of its existence and nature tothe commission the holders of twenty-five per centum in aggregate principalamount of such bonds then outstanding, by instrument or instruments filedwith the Governor of the Commonwealth of Virginia and proved or acknowledgedin the same manner as a deed to be recorded, may appoint a trustee torepresent the holders of all bonds of such series for the purposes hereinprovided.
(c) Such trustee may, and upon written request of the holders of twenty-fiveper centum in principal amount of the bonds of such series then outstandingshall, in his or its name:
(1) By mandamus or other suit, action or proceeding at law or in equity,enforce all rights of the holders of such bonds, including the right torequire the commission to collect fees, rents and other charges adequate tocarry out any agreement as to, or pledge of, such fees, rents or othercharges, or the revenues therefrom, and to require the commission to carryout and perform the terms of any contract with the holders of such bonds orits duties under this chapter;
(2) Bring suit upon all or any part of such bonds;
(3) By action or suit in equity, require the commission to account as if itwere the trustee of an express trust for the holders of such bonds;
(4) By action or suit in equity, enjoin any act or thing which may beunlawful or in violation of the rights of the holders of such bonds;
(5) Declare all such bonds due and payable, whether or not in advance ofmaturity, and, if all defaults shall be made good, then with the consent ofthe holders of twenty-five per centum of the principal amount of such bondsthen outstanding, annul such declaration and its consequences, provided thatbefore declaring such bonds due and payable, the trustee shall first givethirty days' notice in writing to the commission.
(d) If the resolution or resolutions authorizing such series of bonds shallcontain the provision authorized by subsection (a) of this section and shallfurther provide in substance that any trustee appointed pursuant to thissection shall have the powers provided by subsection (c) of this section,then such trustee, whether or not all of the bonds of such series shall havebeen declared due and payable, shall be entitled as of right to theappointment of a receiver, who may enter upon and take possession of anyfacilities or property operated by the commission any of the revenues fromthe operation of which are pledged for the security of such bonds, andoperate and maintain the same and fix, charge, collect and receive all fees,rents and other charges and other revenues thereafter arising from suchoperation in the same manner as the commission itself might do, and shalldeposit all moneys collected in a separate account and apply the same inaccordance with the duties and contracts of the commission in such manner asthe court appointing such receiver shall direct.
(e) In any suit, action or proceeding by such trustee, the fees, counsel feesand expenses of such trustee and of the receiver, if any, shall constitutetaxable costs and disbursements, and all costs and disbursements, allowed bythe court shall be a first charge upon any fees, rents and other charges, andrevenues of the commission pledged for the payment or security of such bonds.
(f) Such trustee shall, in addition to the foregoing, have and possess all ofthe powers necessary or appropriate for the exercise of any functionsspecifically set forth herein or incident to the general representation ofthe holders of the bonds of such series in the enforcement and protection oftheir rights.
(1946, p. 358; Michie Suppl. 1946, § 1560iii9.)