In Northwest Airlines, Inc. v. United States Department of Transportation, 15 F.3d 471 (9th Cir. 1994), prior to going bankrupt, a carrier applied to take over a route. The Department of Transportation (DOT) transferred the route before the bankrupt carrier formally withdrew its application before final approval.
The court held that DOT's action protected the efficient operation of the marketplace by ensuring the route was transferred to a carrier who was able to use it.
In In re Midway Airlines, Inc., 167 B.R. 880 (Bankr. N.D. Ill. 1994), the creditor, an engine service facility, sought to have the automatic stay lifted in order to enforce its liens on some of the debtor's engine parts. The bankruptcy trustee moved for summary judgment contending that the creditor did not have a secured interest in the engine parts.
The court held that the creditor, who had serviced the parts and then retained them upon the debtor's delinquent payments to it, had a colorable claim against the parts which would be determined by a resolution of the factual issues. The trustee's request for summary judgment was, therefore, denied.
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