40:14A-17 - Series of bonds; default; trustee for holders - New Jersey Statutes

40:14A-17.  Series of bonds;  default;  trustee for holders    (a) The provisions of this section shall be applicable to a series of bonds  authorized or issued under this act only if the bond resolution of the sewerage  authority authorizing or providing for the issuance of such bonds shall provide  in substance that the holders of the bonds of such series shall be entitled to  the benefits, and be subject to the provisions, of this section.

    (b) In the event that there shall be a default in the payment of principal of or interest on any bonds of such series after the same shall become due, whether at maturity or upon call for redemption, and such default shall continue for a period of thirty days, or in the event that the sewerage authority shall fail or refuse to comply with the provisions of this act or shall fail or refuse to carry out and perform the terms of any contract with the holders of any of such bonds, and such failure or refusal shall continue for a period of thirty days after written notice to the sewerage authority of its existence and nature, the holders of twenty-five per centum (25%) in aggregate principal amount of the bonds of such series then outstanding, by instrument or instruments filed in the office of the Secretary of State 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 of such series for the purposes  provided in this section.

    (c) Such trustee may and upon written request of the holders of twenty-five  per centum (25%) in aggregate principal amount of the bonds of such series then  outstanding shall, in his or its own name:

    (1) By any action, writ, proceeding in lieu of prerogative writ, or other proceeding, enforce all rights of the holders of such bonds, including the right to require the sewerage authority to charge and collect service charges adequate to carry out any contract as to, or pledge of, system revenues, and to  require the sewerage authority to carry out and perform the terms of any contract with the holders of such bonds or its duties under this act;

    (2) Bring an action upon all or any part of such bonds or interest coupons or claims appurtenant thereto;

    (3) By action, require the sewerage authority to account as if it were the trustee of an express trust for the holders of such bonds;

    (4) By action, enjoin any acts or things which may be unlawful or in violation of the rights of the holders of such bonds;  or

    (5) Declare all such bonds due and payable, whether or not in advance of maturity, upon thirty days' prior notice in writing to the sewerage authority and, if all defaults shall be made good, then with the consent of the holders of twenty-five per centum (25%) of the principal amount of such bonds then outstanding, annul such declaration and its consequences.

    (d) Such trustee shall, in addition to the foregoing, have and possess all of the powers necessary or appropriate for the exercise of the functions specifically set forth herein or incident to the general representation of the holders of bonds of such series in the enforcement and protection of their rights.

    (e) In any action or proceeding by such trustee, the fees, counsel fees and  expenses of the trustee and of the receiver, if any, appointed pursuant to this  act, shall constitute taxable costs and disbursements, and all costs and  disbursements, allowed by the court, shall be a first charge upon any service  charges and system revenues of the sewerage authority pledged for the payment  or security of bonds of such series.

     L.1946, c. 138, p. 659, s. 17.  Amended by L.1953, c. 37, p. 632, s. 11, eff.  March 19, 1953.