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

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Terms Used In Rhode Island General Laws 42-55-17

  • Amortization: Paying off a loan by regular installments.
  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Deed: The legal instrument used to transfer title in real property from one person to another.
  • in writing: include printing, engraving, lithographing, and photo-lithographing, and all other representations of words in letters of the usual form. See Rhode Island General Laws 43-3-16
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Trustee: A person or institution holding and administering property in trust.

(b)  The trustee may, and upon written request of the holders of twenty-five percent (25%) in principal amount of the bonds or notes then outstanding shall, in his, her or its own name:

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

(2)  Enforce all rights of the bondholders or note holders, including the right to collect and enforce the payment of principal of and interest due or becoming due on loans to mortgage lenders and collect and enforce any collateral securing the loans or sell that collateral, so as to carry out any contract as to, or pledge of, revenues, and to require the corporation to carry out and perform the terms of any contract with the holders of the bonds or notes or its duties under this chapter;

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

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

(6)  Declare all 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 the bonds or notes then outstanding, annul the declaration and its consequences.

(c)  The trustee shall in addition to the foregoing have and possess all of the powers necessary or appropriate for the exercise of any functions specifically set forth herein or incident to the general representation of bondholders or note holders 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 corporation, and to the attorney general of the state.

(e)  The superior court of Providence County shall have jurisdiction of any suit, action, or proceeding by the trustee on behalf of bondholders or note holders.

History of Section.
P.L. 1973, ch. 262, § 1.