enhance the values attributable to the Debtor's estate, for the protection of creditors and other parties in interest. They point out that the Park Avenue properties were income-producing, whereas the present properties contribute to operating losses; and that consummation of the transactions here proposed would obviously benefit the Debtor's estate. The argument is made that the Park Avenue case, properly interpreted, does not apply to the present situation. While these arguments have undeniable appeal, the fact remains that the only transactions which were actually approved by this Court in the Park Avenue matter involved properties with many of the attributes of 'wasting assets.' While failure to approve the present transaction would undoubtedly result in very substantial reduction of the amount ultimately available for distribution to creditors in connection with a reorganization plan, I believe most persons would agree, at least with the benefit of hindsight, that similar unfortunate consequences flow from the non-consummation of the Park Avenue transaction.
I have concluded, however, that it is unnecessary to reach a firm decision as to whether the Park Avenue decision could successfully be urged to bar the present proposal, for two reasons. In the first place, I believe the Court of Appeals decision in the Park Avenue case can properly be read as limiting only what a reorganization court may do over objection of lienholders. I do not believe the Court of Appeals intended to preclude approval of property dispositions by the Trustees with the consent or acquiescence of secured creditors. Since the present transaction has the express or tacit approval of the secured creditors affected,
I conclude that this Court may lawfully approve the transaction.
In the second place, and perhaps more importantly, the Park Avenue case was decided in the context of what was assumed to be a standard § 77 railroad reorganization. The interposition of the Regional Rail Reorganization Act of 1973 has substantially altered an essential premise of the Park Avenue Opinion. While I am inclined to believe that, at least until the adoption of a Final System Plan pursuant to the RRRA (and thereafter, at least with respect to properties not included in such plan, and until the appropriate court orders otherwise), the Penn Central reorganization proceeding is still being conducted under § 77 of the Bankruptcy Act (or, to put it another way, that this is still a § 77 reorganization proceeding except as modified by the RRRA), it seems reasonable to suppose that the reorganization-planning role of the Interstate Commerce Commission, which loomed large in the Park Avenue decision, has now greatly diminished in significance. The corresponding function, in the present context, would seem to be the submission of the proposal to United States Railway Association, a step which is contemplated by the agreement.
I recognize that some of the implications of the precise relationship between the RRRA and § 77 are now pending before the Court of Appeals, and I therefore deem it inappropriate to express any final view on these subjects. It suffices to state that the entire situation has changed to such an extent that it would be improper to assume that the Park Avenue decision stands as a bar to approval of the present transaction.
For all of the foregoing reasons, the Trustees' petition will be approved.
AUTHORIZING THE TRUSTEES TO ENTER INTO AND CARRY OUT AGREEMENTS WITH TRUMP ENTERPRISES, INC., RELATING TO 60th STREET and 30th STREET YARDS IN NEW YORK.
And now, this 7th day of March 1975, upon consideration of the 'Petition of the Trustees for Authority to enter into and carry out agreement with Trump Enterprises, Inc., relating to 60th Street Yard and 30th Street Yard in New York, New York' (Petition) and upon hearing duly noticed, it is ordered:
1. The Trustees are hereby authorized to enter into and carry out the terms of the 60th Street Yard and 30th Street Yard Agreements, as amended, in the form exhibited to the Court at the hearing on the Petition and to cause Despatch Shops, Inc. to become a party to the 30th Street Yard Agreement and to carry out its portion thereof and to take any and all action necessary and appropriate for this purpose.
2. The Trustees or their duly authorized designees are hereby authorized to sell and convey free and clear from all liens to the extent stated in the Agreements, as amended, to the party or parties and at the times and terms set forth in the Petition, and to execute and deliver any and all documents necessary to effectuate such transactions; provided however, that all liens on the 30th and 60th Street Yards at the time of sale, including liens authorized by the Court, shall attach to the proceeds from the sale, and to any interest or income earned thereon, in the respective order of priorities thereof.
3. The net proceeds of sale, after deduction of the expenses of sale, shall, subject to any liens thereon, be deposited with Girard Trust Bank in accordance with the provisions of Order No. 619 herein.
4. Before making any election to enter into one or more limited partnership agreements as specified in the 60th Street Yard Agreement and 30th Street Yard Agreement and any contributions to such limited partnerships required under each agreement the Trustees shall petition this Court on at least five (5) days' notice to all parties customarily notified seeking approval of any such election or contribution and no such election or contribution shall be made except upon further Order of this Court.
5. The Trustees are authorized to pay the incentive fee as set forth in the Petition.