2010 New York Code
RPP - Real Property
Article 4 - (119 - 123) USES AND TRUSTS
123 - Preserving existing rights.

§ 123. Preserving existing rights. Nothing in this act shall be deemed
  to  prevent  any  bondholder or committee of bondholders from bidding at
  the foreclosure sale and in case he  or  they  should  be  a  successful
  bidder,  from  applying upon the purchase price the bonds held by him or
  them at the amount distributable thereon and reorganizing  the  property
  so  purchased  in  any manner which was lawful prior to the enactment of
  this act, nor to impair any previously existing right of a trustee so to
  purchase and pay for the property, or  to  preclude  any  trustee  which
  shall  have  purchased such property from submitting to the court a plan
  for its reorganization. The court may provide for the  qualification  of
  bidders  other  than  the  trustee by requiring them to deposit with the
  officer conducting the sale in advance of bidding up to ten  per  centum
  of  the  amount  of their bid in cash or in bonds taken at the principal
  amount  thereof.  In  any  action  now  or  hereafter  pending  for  the
  foreclosure  of  any  such mortgage or indenture, the property shall, on
  application of the trustee, be sold subject to the lien  of  any  taxes,
  assessments  and  water rates, any prior lien, or to any liens which may
  thereafter be established, which are the subject of  litigation  pending
  at the time of the sale, provided a brief statement thereof is contained
  in the notice of sale.