2010 New York Code
RPP - Real Property
Article 4 - (119 - 123) USES AND TRUSTS
120-A - Liquidation of mortgage by trustee.

§  120-a.  Liquidation of mortgage by trustee. Any banking corporation
  or individual acting as trustee in respect to  any  mortgage  upon  real
  property  against  which  bonds shall have been issued to the public and
  which mortgage shall have been given to such trustee  by  a  corporation
  organized under the provisions of section one hundred twenty-one hereof,
  pursuant  to  a  plan  of reorganization approved by the court and which
  became effective under section one hundred twenty-two hereof,  or  which
  mortgage  shall  have  been  given  pursuant to a plan of reorganization
  heretofore or hereafter approved and confirmed under the bankruptcy acts
  of the United States, or which mortgage shall have been  given  to  such
  trustee under a voluntary plan of reorganization by a corporation caused
  to be organized by a bondholders' committee for the purpose of acquiring
  the  property  secured  by  such  mortgage at a sale under a judgment of
  foreclosure  and  sale  of  a  prior  mortgage  given  to  secure  bonds
  theretofore  issued to the public, may, with the approval of the supreme
  court in the county where all or part of the property affected  by  such
  mortgage  is  situate,  sell, assign, discharge or satisfy such mortgage
  upon such consideration in  cash  as  the  court  shall  deem  fair  and
  equitable  to  the  bondholders  and as the court by order shall direct.
  Such order may be made upon the application of the trustee or the holder
  of twenty-five per cent of the bonds or of the mortgagor  or  owners  of
  the  property  securing  such  mortgage.  The  court may approve a sale,
  assignment, discharge or satisfaction at such price as may appear to the
  court to be fair and in the best interests of the  bondholders  and  not
  less  than  the  cash  value  of said mortgage if sold at a public sale,
  unless duly acknowledged  dissents  thereto  by  holders  of  more  than
  one-third  of  the  principal  amount of the bonds then outstanding have
  been filed. If the application for such sale shall be  consented  to  by
  the  holders  of  two-thirds  of  the  principal  amount  of  the  bonds
  outstanding such consent shall constitute a presumption that it is  fair
  and  in  the  best  interests  of  the bondholders that said mortgage be
  liquidated at the price fixed in such consent and the court may  approve
  a  sale  at  such  amount  unless it shall appear to the court that such
  amount is less than the cash value of said mortgage if sold at a  public
  sale.  If  the  application shall not be made by the trustee then notice
  shall be given to the trustee and  in  any  event  the  order  directing
  notice  to the bondholders of the application to liquidate such mortgage
  shall provide for personal service of such notice not less  than  thirty
  days  before  the  return  date thereof upon not less than ten specified
  bondholders whose addresses are known to the  applicant  and  notice  by
  mail  to  all  of  the  bondholders  whose  addresses  are known and the
  publication of such  notice  once  a  week  on  a  week  day  for  three
  successive  weeks  preceding the return date thereof in one newspaper of
  general circulation published in the  city  or  county  where  the  real
  property  securing  said mortgage is located. Except as herein otherwise
  provided all proceedings hereunder and the rights of the parties hereto,
  shall be governed by section one hundred twenty-two hereof; except  that
  if the order shall become effective it shall be without prejudice to the
  right  of  any  particular  bondholder who has filed a duly acknowledged
  dissent therefrom, within the time fixed in the order, to have the court
  determine the cash value of the mortgage securing such bond if sold at a
  public sale and providing for the payment or securing his ratable  share
  of such amount as a condition for declaring the order effective.
    If  any provision of this section or of section one hundred twenty-two
  hereof or any clause, sentence, paragraph or any part of such section or
  the application thereof to any person  or  circumstance  shall  be  held
  unconstitutional  or invalid, such decision or judgment shall not affect
  or impair the constitutionality or validity of  the  remainder  thereof,

but  shall  be  confined  in  its  operation  to  the  clause, sentence,
  paragraph  or  part  thereof  directly  involved  in  such  decision  or
  judgment.