Whenever the commission shall function in any municipality and so long as it shall continue to do so, no action or proceeding shall be brought or prosecuted, the purpose of which is to affect the disposition of property or funds owned or controlled by the municipality, except as provided in this chapter.

If any such municipality has in its possession or under its control, or there is in the possession or under the control of the commission, any property or funds of such municipality which are or may be available for the payment of interest or principal upon any of the debts of such municipality (over and above the payment of the current operating expenses of the municipality and the maintenance of a reasonable working capital), then such municipality in its discretion may bring an action, or if directed by the commission shall do so, in the Superior Court to determine the application and distribution of such property or funds to and among the creditors of the municipality, and in any such case the court in its discretion may permit an action for relief of the same character to be made by any creditor of the municipality. In any such action all creditors of the municipality shall be made parties thereto, and any creditor may appear therein and assert his rights to receive all or any part of such property or funds. The court may proceed in the action in a summary manner or otherwise.

In case any such action shall be instituted, the court may direct the municipality to make no payments from any of such moneys so available until the determination of the action or until permitted by the court. Unless and until such a direction shall be made, payments may be made by such municipality on account of principal and interest as the municipality may determine and as may be approved by the commission.

Amended by L.1953, c. 49, p. 873, s. 36.