For Your Data Flushing National Banking Concern 5 Municipal Assistance Corp. Instance Brief Summary

Flushing National Bank v Municipal Assistance Corp. instance brief summary

40 NY2D 731
 

                                                              i.      π, banking concern on behalf of noteholders, sought review of the gild from the Appellate Division of the Supreme Court affirming a judgment entered granting ∆ NYC summary judgment & declaring that the provision of the NY State Emergency Moratorium Act was valid as well as constitutional.

                                                            ii.      NYC passed the New York State Emergency Moratorium Act for the City of New York which imposed a 3-year moratorium on actions to enforce the city's outstanding short-term obligations (Deal was gear upward that you lot could telephone substitution your urban marrow bonds (short term) for MAC long term bonds, giving the urban marrow approximately room to breathe, or you lot could continue the banknote as well as non become paid. ). The bank, on behalf of other holders of notes, filed an activeness alleging that the Act violated both the nation as well as federal constitutions. The appellate courtroom affirmed a judgment entering summary judgment inwards favor of the urban marrow as well as declaring the Act valid as well as constitutional. On appeal, the ct reversed, belongings that N.Y. Con. art. VIII stated that a urban marrow couldn’t accept contractual indebtedness unless it had pledged its faith as well as credit for the payment of the master copy thereof as well as the involvement thereon. The ct held that the constl. prescription of a pledge of faith as well as credit was designed to protect the rights vulnerable inwards the fifty-fifty of hard economical circumstances as well as that it was conclusive that the constitution permitted no escape for the municipality from performing its obligations.

                                                          iii.      The courtroom reversed the gild from the appellate ct. The courtroom held that the NY Constitution provided that ∆, NYC, could non accept contractual indebtedness unless it had pledged its faith as well as credit for the payment of the master copy thereof as well as the involvement thereon.you can’t only non pay if they are General Obligation Noteholders.

1.       If NYC don’t pay bond indebtedness, wont endure able to heighten majuscule for a long time

2.       NYC needed to only heighten taxes as well as pay the notes.

3.       The policy selection was for the future: If you lot don’t pay your bondholders you lot won’t endure able to become coin on the bond marketplace inwards the future. But they temper this past times maxim at the destination that no extraordinary remedy is available

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