New York Laws
Article 4 - 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.

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