Download as PDF
76.261 Default on revenue bonds -- Trustee appointed -- Actions by trustee,
receiver, powers.
(1)
(2)
(3)
(4)
(5)
The holders in aggregate principal amount of twenty percent (20%) of any
class of construction subdistrict bonds authorized by KRS 76.254 may ex parte
move a judge of the Circuit Court of the county containing the construction
subdistrict to appoint a trustee to represent all of the holders of the same class
of bonds when the facts described in paragraph (b) of subsection (2) have
occurred.
The judge shall appoint a trustee (which may be corporate) upon a showing
that:
(a) Movants in fact are holders of twenty percent (20%) or more of the
aggregate principal amount of the affected class of the bonds;
(b) Movants claim that there has been a default exceeding thirty (30) days in
the payment of interest or principal on the bonds, that the district has
failed to comply with the provisions of KRS 76.005 to 76.295 relating to
construction subdistrict bonds, or that the district has breached a contract
with the holders of the bonds; and
(c) Movants have filed in the office of the county clerk of the county
containing the district an instrument in the nature of a notice of action
against the district which instrument states that movants have applied to
have a trustee appointed pursuant to this section and which names the
affected construction subdistrict.
The trustee may, or upon written request of any twenty percent (20%) in
aggregate principal amount of his bondholder beneficiaries shall, file an action
in his name against the district; the action shall seek all remedies, including but
not limited to mandamus, prohibition, judgment against a special fund or funds,
injunction, and declaratory judgment, needed to preserve and enforce the
rights of the bondholders. The action shall be filed in the Circuit Court of the
county containing the district.
The rights of bondholders include, but are not limited to, the right to:
(a) Require the district to collect from the construction subdistrict rates,
rentals, and charges adequate to pay principal and interest on the bonds;
(b) Require the district to perform all lawful agreements with the bondholders;
(c) Require the district to account to the bondholders as if it were trustee of
an express trust for their benefit;
(d) Have the district enjoined from doing any acts or things which may be
unlawful or in violation of the rights of the bondholders;
(e) Have all bonds of the affected class declared due and payable.
Any trustee, whether or not all bonds have been declared due and payable,
shall be entitled as of right, upon application to the Circuit Court, to the
appointment of a receiver, who may enter upon and take possession of the
construction subdistrict facilities, or any part thereof, and operate and maintain
the same, and collect and receive all rentals, rates, other charges, and
revenues of the construction subdistrict payable after commencement of the
receivership. The receiver shall deposit such moneys in a separate account
and apply them as the court directs. In any suit, action, or proceeding, by the
trustee, the fees, counsel fees, and expenses of the trustee and of the receiver,
if any, shall constitute disbursements taxable as costs. All costs and
disbursements allowed by the court shall be a first charge on any revenue
derived from the construction subdistrict facilities. 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 the bondholders in the enforcement and protection of
their rights.
Effective:July 15, 1980
History: Amended 1980 Ky. Acts ch. 188, sec. 60, effective July 15, 1980. -Amended 1978 Ky. Acts ch. 384, sec. 199, effective June 17, 1978. -- Created
1964 Ky. Acts ch. 33, sec. 25.
Disclaimer: These codes may not be the most recent version. Kentucky may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.