13-23-123 - Remedies of bondholders and noteholders Trustees. - Tennessee Statutes

13-23-123. Remedies of bondholders and noteholders Trustees.

(a)  In the event that the agency shall default in the payment of principal of or interest on any bonds or notes issued under this part after the same shall become due, whether at maturity or upon call for redemption, and such default shall continue for a period of thirty (30) days, or in the event that the agency shall fail or refuse to comply with the provisions of this part, or shall default in any agreement made with the holders of any issue of bonds or notes, the holders of twenty-five percent (25%) in aggregate principal amount of the bonds or notes of such issue 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 such bonds or notes for the purposes herein provided.

(b)  Such trustee may, and upon written request of the holders of twenty-five percent (25%) in principal amount of such bonds or notes then outstanding shall, in such trustee's own name:

     (1)  Enforce all rights of the bondholders or noteholders, including the right to require the agency to collect interest and amortization payments on the mortgages held by it adequate to carry out any agreement as to, or pledge of, such interest and amortization payments, and to require the agency to carry out any other agreements with the holders of such bonds or notes and to perform its duties under this part;

     (2)  Enforce all rights of the bondholders or noteholders, including the right to require the agency to carry out and perform the terms of any contract with the holders of such bonds or notes or its duties under this part;

     (3)  Bring suit upon all or any part of such bonds or notes;

     (4)  By action or suit, require the agency to account as if it were the trustee of an express trust for the holders of such bonds or notes;

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

     (6)  Declare all such bonds or notes due and payable and if all defaults shall be made good, then, with the consent of the holders of twenty-five percent (25%) of the principal amount of such bonds or notes then outstanding, to annul such declaration and its consequences.

(c)  Such trustee shall, in addition to the foregoing, have and possess all the powers necessary or appropriate for the exercise of any functions specifically set forth herein or incident to the general representation of bondholders or noteholders in the enforcement and protection of their rights.

(d)  Before declaring the principal of bonds or notes due and payable, the trustee shall first give thirty (30) days' notice in writing to the governor, to the agency and to the attorney general and reporter.

(e)  The circuit or chancery court shall have jurisdiction of any suit, action or proceeding instituted on behalf of the bondholders or noteholders by such trustee or any trustee appointed and acting in conformity with § 13-23-120(i). The venue of any such suit, action or proceeding shall be laid in Davidson County.

[Acts 1973, ch. 241, § 13; 1974, ch. 702, § 8; 1977, ch. 483, § 8; T.C.A., § 13-2323.]