§ 8761A. Default in payment of state-guaranteed bonds; insufficient revenues to make payment.
428 words·~2 min read·
/de/title-29/subchapter-vii-delaware-economic-development-authority/8761a·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
If any payment of principal, premium, if any, or interest due to the Authority or to a trustee or other person as assignee of the Authority with respect to a project financed by proceeds from state-guaranteed bonds is in default, or if sufficient revenues are not available to make such payment, the Authority:
(1)Shall forthwith direct (if it has not previously done so) the person holding the cash reserve fund deposited pursuant to § 8754A(d)(5) of this title to apply such cash reserve fund to the payment of principal, premium, if any, and interest on such state-guaranteed bonds as the same become due;
(2)Shall forthwith give notice of such default or occurrence to the Governor, the Secretary of State, the Secretary of Finance, the Auditor of Accounts, the Speaker of the House of Representatives, the President Pro Tempore of the State and the Controller General. Thereafter, the General Assembly shall appropriate sufficient funds to pay principal, premium, if any, and interest on such state-guaranteed bonds when due. Any funds made available pursuant to such appropriation shall be deposited by the Authority in the appropriate cash reserve fund;
(3)Shall exercise its rights to secure its title and take possession of the project and any other assets pledged, assigned or transferred to the Authority in connection with the financing of the project. The Authority shall thereupon attempt to realize from the sale, lease or other disposition of the project assets sufficient funds to meet debt service on the outstanding state-guaranteed bonds. Realized funds shall first be applied to meet the costs, incurred or to be incurred, of administering such project. Thereafter, such funds shall be applied by the Authority to any lawful purpose of the Authority including, but not limited to, the payment of principal and interest on state-guaranteed bonds for such project. The remainder of such funds, after payment of or provision for the payment of the foregoing, shall be paid into the General Fund of the State;
(4)Trustees for holders of state-guaranteed bonds are hereby authorized to release to the Authority the proceeds of sale, lease or other disposition of any real or personal property comprising the project less any proceeds, to be held in a principal or interest payment fund necessary to meet principal of and interest on such state-guaranteed bonds for the 12-month period following the date of such transfer. The State shall indemnify, defend and hold harmless the trustee for any losses that may reasonably be incurred by the trustee by virtue of the transfer of such proceeds of the property.