New York Consolidated Laws, Real Property Law - RPP § 123. Preserving existing rights

Nothing in this act shall be deemed to prevent any bondholder or committee of bondholders from bidding at the foreclosure sale and in case he or they should be a successful bidder, from applying upon the purchase price the bonds held by him or them at the amount distributable thereon and reorganizing the property so purchased in any manner which was lawful prior to the enactment of this act, nor to impair any previously existing right of a trustee so to purchase and pay for the property, or to preclude any trustee which shall have purchased such property from submitting to the court a plan for its reorganization.  The court may provide for the qualification of bidders other than the trustee by requiring them to deposit with the officer conducting the sale in advance of bidding up to ten per centum of the amount of their bid in cash or in bonds taken at the principal amount thereof.  In any action now or hereafter pending for the foreclosure of any such mortgage or indenture, the property shall, on application of the trustee, be sold subject to the lien of any taxes, assessments and water rates, any prior lien, or to any liens which may thereafter be established, which are the subject of litigation pending at the time of the sale, provided a brief statement thereof is contained in the notice of sale.