In re Boston & Maine Corp.

Summary

The First Circuit affirmed the refusal to order immediate payment of pre-reorganization freight-car per diem claims owed to appellant railroads. The court held that these claims were ordinary pre-reorganization unsecured claims subject to the reorganization court’s authority to establish payment priorities and timing, notwithstanding the Interstate Commerce Commission’s authority over railroad operations and car-service rates. The court distinguished claims supported by pre-reorganization services from post-reorganization administrative expenses and rejected the contrary approach taken in Matter of Chicago, R.I. & P.I. R.R. Co.

Holdings

1. The Interstate Commerce Commission's general authority over the trustee's railroad operations does not eliminate the reorganization court's discretion to establish priorities and schedule payment of pre-reorganization claims.
2. The ICC's 1968 decision concerning past rates was advisory and did not constitute an exercise of the Commission's power to set rates or order payment for the 1953-1969 period.
3. Per diem claims supported by pre-reorganization car use remain claims against the debtor, not expenses of administration or obligations of the trustee, even if settlement occurred after the reorganization petition was filed.
4. Trailer Train was not entitled to immediate payment because policy considerations favoring prompt per diem payment cannot override the reorganization court's discretion when no direct ICC order applied to its rentals.

Questions Presented

1. Whether the Interstate Commerce Commission's general authority over railroad operations and car-service rates required the reorganization trustee to pay pre-reorganization freight-car per diem claims immediately.
2. Whether the ICC's 1968 determination concerning 1953-1969 rates constituted an order fixing rates or directing payment that superseded the reorganization court's control over pre-reorganization claims.
3. Whether per diem charges based on car use before the reorganization filing became post-filing obligations merely because the charges were settled or the ICC order became effective after filing.
4. Whether Trailer Train, a car-line owner and lessor rather than a railroad, could obtain immediate payment based on the policy underlying ICC per diem orders.

Disposition

affirmed