§ 41B.17 — Powers and Duties of Trustee
Plain-Language Summary
This section describes the powers of a trustee who oversees bond security for the Rural Finance Authority. The trustee can enforce bondholder rights, sue on the bonds, require the authority to account for funds, stop unlawful acts, and declare all bonds due if there is a default.
41B.17 POWERS AND DUTIES OF TRUSTEE.
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Subdivision 1.General.
The trustee designated in any indenture or resolution securing an issue of bonds may, and upon written request of the holders of 25 percent in principal amount of the notes or bonds then outstanding shall, in the trustee’s own name, subject to the provisions of the indenture or resolution:
(1) enforce all rights of the bondholders, including the right to require the authority to collect fees, charges, interest, and payments on loans or interests therein held by the authority and eligible securities purchased by it adequate to carry out any agreement as to, or pledge of, those fees, charges, and payments, and to require the authority to carry out any other agreements with the holders of the notes or bonds and to perform its duties under sections 41B.01 to 41B.23;
(2) bring suit upon the bonds;
(3) require the authority to account as if it were the trustee of any express trust for the holders of the bonds;
(4) enjoin any acts or things which may be unlawful or in violation of the rights of holders of the bonds; or
(5) declare all the bonds due and payable, and if all defaults are made good, then, with the consent of the holders of 25 percent of the principal amount of the bonds then outstanding, the trustee may annul the declaration and consequences. §
Subd. 2.Additional powers.
In addition to the powers in subdivision 1, the trustee has all of the powers necessary or appropriate for the exercise of any functions specifically set forth in this section or incident to the general representation of bondholders or noteholders in the enforcement and protection of their rights. §
Subd. 3.Venue; notice.
The venue of any action or proceedings brought by a trustee under sections 41B.01 to 41B.23, is in Ramsey County. Before declaring the principal of bonds due and payable, the trustee shall first give 30 days’ notice in writing to the governor, the authority, and the commissioner of management and budget.
History:
1986 c 398 art 6 s 17; 1987 c 396 art 1 s 31; 2003 c 112 art 2 s 50; 2009 c 101 art 2 s 109
History: History: 1986 c 398 art 6 s 17; 1987 c 396 art 1 s 31; 2003 c 112 art 2 s 50; 2009 c 101 art 2 s 109