Warren v. Palmer - 310 U.S. 132 (1940)
U.S. Supreme Court
Warren v. Palmer, 310 U.S. 132 (1940)
Warren v. Palmer
Argued March 29, April 1, 1940
Decided April 29, 1940
310 U.S. 132
Where a railroad system, in a reorganization proceeding under § 77 of the Bankruptcy Act, includes a leased line, operated at a loss and which cannot be operated by its owner, and where, by order of the court, the trustees have rejected the lease but have continued to operate the leased road for the account of the lessor,
the amount of the deficit chargeable to the lessor and to impose a first lien on the leased property to secure it, and to do this after proceedings for reorganization of the lessor company under § 77 have been instituted in another district where the leased line is situate. P. 310 U. S. 140.
108 F.2d 164 affirmed.
Certiorari, 309 U.S. 645, to review the affirmance of an order of the District Court in a railroad reorganization proceeding under § 77 of the Bankruptcy Act. The order fixed the amount of a deficit arising from the operation of a leased line and declared it a first lien on the leased property. Only the question of the bankruptcy court's jurisdiction to do this was brought here.