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8.A. - Page 56 cannot be made separately from property tax payments. Therefore, the unwillingness or uzability of a property owner to pay regular property tax bills as evidenced by property tax delinquencies may also indicate an unwillingness or inability to mlke regular property tax payments and Special Tax installment payments in the future. See "SECURITY FOR THE BONDS—Reserve Fund" and "-Covenant for Superior Court Foreclosure" for a discussion of the provisions which apply, and procedures which the District is obligated to follow under the Fiscal Agent Agreement, in the event of delinquency in the payment of Special Tax installments. See also "SECURITY FOR THE BONDS—County Teeter Plan," and "THE DISTRICT—Special Tax Levies and Delinquencies" for historical Special Tax delinquency history. Bankruptcy Delays The payment of the Special Tax and the ability of the City to commence a superior court action to foreclose the lien of a delinquent unpaid Special Tax, as discussed in "SECUIZITY FOR THE BONDS—Covenant or Superior Court Foreclosure," may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights or by the laws of the State of California relating to judicial foreclosure. Any legal opinion to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecti�zg creditors' rights, by the application of equitable principles and by the exercise of judicial discretion in appropriate cases. Although bankruptcy proceedi�zgs would not cause the Special Taxes to become extinguished, bankruptcy of a property owner or any other person claiming an interest in the property could result in a delay in superior court foreclosure proceedings 1nd could result in the possibility of Special Tax installmeilts not being paid in part or in full. Such a delay would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds. Proceeds of Foreclosure Sales Pursuant to Section 53356.1 of the Act, in the event of any delinquency in the payment of 1ny Special Tax, the City Council, as the legislative body of the District, may order thlt the Special Taxes be collected by a superior court action to foreclose the lien within specified time limits. The City has covenanted in the Fiscal Agent Agreement tllat it will, under certain circumstances, commence such a foreclosure action. See "SECURITY FOR THE BONDS— Covenant for Superior Court Foreclosure." No assurances can be given that a Taxable Parcel in the District that would be subject to a judicial foreclosure sale for deluzquent Special Taxes will be sold or, if sold, that the proceeds of such sale will be sufficient to pay the delinquent Special Tax installment. Although the Act authorizes the City to cause such an action to be commenced and diligently pursued to completion, the Act does not specify any obligation of the City with regard to purchasi�lg or otherwise acquiring any lot or parcel of property sold at the foreclosure sale u1 any such action if there is no other purchaser 1t such sale 1nd the City has not in any way agreed nor does it expect to be such a bidder. In a foreclosure proceeding, a judgment debtor (i.e., the property owner) has 140 days from the date of service of the notice of levy in which to redeem the property to be sold and may have other redemption rights afforded by law. If a judgment debtor fails to so redeem and the property is sold, his only remedy is an action to set aside the sale, which must be brought within 90 days of the date of sale if the purchaser at the sale was the judgment -32-