Section 2878. Supervision

1. The commissioner may from time to time make,
  alter, amend and repeal  rules  and  regulations  for  the  supervision,
  examination,  regulation  and  audit  of  an  eligible  borrower and for
  carrying into effect the provisions and purposes of  this  article,  and
  each  eligible  borrower shall submit an annual report of its operations
  to the commissioner and the agency who may examine and audit  the  books
  and records of the eligible borrower at any time.
    2.  The  commissioner and the department of health shall have power to
  act for and in behalf of the agency in servicing the hospital  loans  of
  the  agency,  and  to  perform such functions and services in connection
  with the making, servicing and collection of  such  loans  as  shall  be
  requested by the agency.
    3.  (a)  The  commissioner and the department may, with respect to any
  hospital project of which the agency has acquired the fee or  otherwise,
  enter  into an agreement with said agency subject to the approval of the
  director of the budget, for the department, as provided in paragraph (b)
  of this subdivision, to operate the said project in a manner  consistent
  with  the purposes of this article.  In such event, the commissioner, on
  behalf of the department, shall have the  power  to  use  any  available
  funds to pay all operating expenses and to comply with all the terms and
  provisions  of the mortgage, if any, as though the mortgage had not been
  foreclosed, or any other applicable agreement and  to  comply  with  the
  provisions of this article.
    (b)  Subject  to the provisions of the agreement with said agency, the
  commissioner may contract with any person, firm or corporation which  he
  deems  qualified  to operate and manage such project and to perform such
  duties and functions as he may deem necessary.
    4. Whenever the commissioner shall be of the opinion that an  eligible
  borrower  is  failing  or  omitting,  or  is about to fail or omit to do
  anything required of it by law or by order of the  commissioner  and  is
  doing or is about to do anything, or permitting anything, or is about to
  permit anything to be done, contrary to or in violation of law or of any
  order of the commissioner, or which is improvident or prejudicial to the
  interest  of  the  public,  the  lienholders,  the  shareholders, or the
  occupants, the commissioner may, in addition to such other  remedies  as
  may  be available, commence an action or proceeding in the supreme court
  of the state of New York in  the  name  of  the  commissioner,  for  the
  purpose  of  having such violations or threatened violations stopped and
  prevented, and in such action or proceeding, the  court  may  appoint  a
  temporary or permanent receiver or both. Such action or proceeding shall
  be  commenced by a petition to the supreme court, alleging the violation
  complained of and praying for appropriate relief. It shall thereupon  be
  the  duty  of  the  court to specify the time, not exceeding twenty days
  after service of a copy of  the  petition,  within  which  the  eligible
  borrowers complained of must answer the petition. In case of any default
  or  after  answer the court shall immediately inquire into the facts and
  circumstances in such manner as the court shall direct in  the  interest
  of  substantial  justice  without  other or formal pleading.  Such other
  persons or corporations as it shall  seem  to  the  court  necessary  or
  proper  to  join  as  parties  in  order  to  make its order or judgment
  effective, may be joined as parties. The  final  judgment  in  any  such
  action  or  proceeding  shall either dismiss the action or proceeding or
  direct that an order or an injunction, or both, issue,  or  provide  for
  the  appointment  of  a receiver as prayed for in the petition, or grant
  such other relief as the court may deem appropriate.