Ala. Code § 22-21-331

Current through the 2024 Regular Session.

Section 22-21-331 - Remedies for default in payment of securities or performance of lease agreement

(a) If there should be any default in the payment of the principal of or interest on any securities issued under this article, then the holder of any such securities and any coupons applicable thereto (subject to any provision of the resolution or indenture under which such securities were issued restricting the individual rights of action of any such holders or vesting such rights exclusively in a trustee), and the trustee under any indenture, or any one or more of them:

(1) May, by mandamus, injunction or other proceedings, compel performance of all duties of the directors and officers of the authority with respect to the use of funds for the payment of such securities and for the performance of the agreements of the authority contained in the proceedings under which they were issued;

(2) Shall be entitled to a judgment against the authority for the principal of and interest on the securities so in default;

(3) May, in the event such securities are secured by a mortgage on or security interest in any physical properties of the authority, foreclose such mortgage or pledge, exercise any powers of sale contained therein or exercise any possessory or other similar rights as are provided for in the resolution or indenture under which such securities were issued;

(4) Regardless of the sufficiency of the security for the securities in default and as a matter of right, shall be entitled to the appointment of a receiver:

a. To make lease agreements respecting any health care facilities or other properties out of whose revenues the securities so in default are payable and fix and collect rents therefor; and

b. To operate, administer and maintain such health care facilities and other properties, with all powers of a receiver in the exercise of any of said functions.

The income derived from any lease agreement made, and any operation of such health care facilities and other properties carried on, by any such receiver shall be expended in accordance with the provisions of the proceedings under which the securities were authorized to be issued and the orders of the court by which such receiver is appointed.

(b) If there should be any default by the authorizing subdivision in the payment of any installment of rent or in the performance of any agreement required to be made or performed by it under the provisions of any lease agreement described in Section 22-21-330, the authority and the trustee under any indenture, or either of them:

(1) May, by mandamus, injunction or other proceedings, compel performance by the officials of the authorizing subdivision of their duties respecting the payment of the rentals required to be paid and performance of the agreements on the part of the authorizing subdivision required to be performed under any such lease agreement; and

(2) Shall be entitled to a judgment against the authorizing subdivision for all monetary payments required to be made by the authorizing subdivision under the provisions of such lease agreement with respect to which the authorizing subdivision is then in default.

(c) The remedies specified in this section shall be cumulative to all other remedies which may otherwise be available, by law or contract, for the benefit of the holders of the securities and the coupons applicable thereto.

Ala. Code § 22-21-331 (1975)

Acts 1982, No. 82-418, p. 629, §22.