IN RE EASTERN FREIGHT WAYS, INC.

No. 738, Docket 77-5036.

577 F.2d 175 (1978)

In re EASTERN FREIGHT WAYS, INC., Bankrupt. Sidney B. GLUCK, Trustee in Bankruptcy of Eastern Freight Ways, Inc., Plaintiff-Appellee, v. SEABOARD SURETY COMPANY, Defendant-Appellant, Manufacturers Hanover Trust Company, individually and as agent for other institutional lenders, International Harvester Credit Corporation, Fruehauf Corporation and the Chase Manhattan Bank, National Association, and Thomas J. Cahill, Trustee in Bankruptcy of Associated Transport, Inc., Defendants-Appellees.

United States Court of Appeals, Second Circuit.

Decided May 25, 1978.


Attorney(s) appearing for the Case

Solomon M. Cheser, New York City (Tell, Cheser, Breitbart & Lefkowitz, and Wickes, Riddell, Bloomer, Jacobi & McGuire, New York City, James W. Harbison, Jr., Thomas R. Stritter, New York City, of counsel), for defendant-appellant Seaboard Surety Company.

Michael R. Kleinerman, New York City (Booth, Lipton & Lipton, Edgar H. Booth, New York City, of counsel), for plaintiff-appellee Sidney B. Gluck, Trustee in Bankruptcy of Eastern Freight Ways, Inc.

Theodore Gewertz, New York City (Wachtell, Lipton, Rosen & Katz, Ronald M. Neumann, New York City, of counsel), for defendant-appellee Manufacturers Hanover Trust Co.

Lewis Kruger, New York City (Krause, Hirsch & Gross, Christina Burks Lee, Barbara G. Kaplan, New York City, of counsel), for defendant-appellee International Harvester Credit Corp.

Toni C. Lichstein, New York City (Milbank, Tweed, Hadley & McCloy, Russell E. Brooks, New York City, of counsel), for defendant-appellee The Chase Manhattan Bank, National Association.

Anderson Russell Kill & Olick, New York City (Arthur S. Olick, Poppy B. Quattlebaum, New York City, of counsel), for defendant-appellee Thomas J. Cahill, Trustee in Bankruptcy of Associated Transport, Inc.

Before FEINBERG, MANSFIELD and OAKES, Circuit Judges.


FEINBERG, Circuit Judge:

The conflicting claims of two trustees in bankruptcy, a surety to the bankrupts, an obligor on a two million dollar letter of credit in favor of the surety, and three secured creditors with perfected interested in the accounts receivable of one of the bankrupts form the background for this appeal. The surety, Seaboard Surety Company ("Seaboard"), appeals from an order of Judge Edmund L. Palmieri in the United States District Court for the...

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