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IN RE TEXLON CORP.

No. 669, Docket 78-5027.

596 F.2d 1092 (1979)

In re TEXLON CORPORATION, Bankrupt. William OTTE, as Trustee in Bankruptcy of Texlon Corporation, Plaintiff-Appellee, v. MANUFACTURERS HANOVER COMMERCIAL CORPORATION, Defendant-Appellant.

United States Court of Appeals, Second Circuit.

Decided April 20, 1979.

Attorney(s) appearing for the Case

Morton L. Gitter, New York City (Otterbourg, Steindler, Houston & Rosen, P. C., New York City), for plaintiff-appellee.

Michael S. Landes, New York City (Hahn, Hessen, Margolis & Ryan, New York City, Gilbert Backenroth, New York City, of counsel), for defendant-appellant.

Before FRIENDLY, SMITH and MANSFIELD, Circuit Judges.

FRIENDLY, Circuit Judge:

This appeal from an order of the District Court for the Southern District of New York concerns a controversy between Manufacturers Hanover Commercial Corporation (MHCC) and the trustee in bankruptcy of Texlon Corporation (Texlon), formerly a debtor in possession in a Chapter XI proceeding, which began early in 1975. It concerns a practice, euphemistically called "cross-collateralization", which, we are told, has been authorized not infrequently...

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