(1) SELECTION.—In any action to foreclose the lien of any mortgage or deed of trust given to secure any issue of bonds or other obligations and encumbering real or personal property or both when the owners of the bonds or beneficiaries of the trust exceed ten in number, on motion of a party or on its own initiative, the court may appoint three persons, two of whom shall constitute a quorum for all purposes, as a committee for the protection of the holders of bonds or units or certificates of beneficial interest. The committee is vested with such powers and authority and shall discharge such duties in connection with the litigation and its subject matter as is necessary and proper in the court’s discretion to protect the interest of the holders of the bonds and beneficiaries of the trust involved in, or affected by, the litigation. During the pendency of such litigation, the court may prescribe, modify, abrogate or nullify the powers and authority of the committee.
(2) QUALIFICATIONS.—No person is eligible for appointment to, nor qualified to act as a member of, the committee who is interested in the outcome of the action or in the subject matter thereof, or who is an officer, director or stockholder of any party to the actions, or who is related by blood or marriage to, or directly or indirectly associated with or employed by:
(a) Any official of the court.
(b) Any person who is interested in the outcome of the actions.
(c) Any person who is interested in the subject matter.
(d) Any person who is an officer, director or stockholder of any corporate party to the action.
(3) COMPENSATION AND EXPENSES.—The compensation and expenses of the committee shall be fixed by the court and may be taxed as costs and ordered paid by such parties in interest, and in such manner and at such time, and out of such funds or property involved in the action as the court determines. The court may remove any members of the committee and appoint a successor or successors to fill the vacancies that result from removal, resignation or death of members of the committee. The committee is subject to the supervision and control of the court at all times, and amenable to its orders until the approval of the final reports, if any, of the committee and the discharge of the committee by the court.
(4) EMPLOYMENT OF COUNSEL.—The employment of counsel by the committee shall be approved by the court and the compensation of counsel shall be fixed by the court.
(5) ONLY LEGALLY APPOINTED COMMITTEES RECOGNIZED.—Any bondholders’ committee not appointed by the court in which the action is pending shall be heard in the action or permitted, directly or indirectly, to dominate or control the litigation or the action of the trustee or trustees under deed or deeds of trust under which the action is predicated, nor permitted to acquire, directly or indirectly, the property at any sale in said action.