In re Penn-Dixie Steel Corp., 81 CIV. 18(MP)

• Decision Date: 06 April 1981
• Docket Number: Bankruptcy No. 0 10472,Adv. No. 80 5159A.,No. 81 CIV. 18(MP),81 CIV. 18(MP)
• Citation: 10 BR 878
• Parties: In re PENN-DIXIE STEEL CORPORATION, Debtor. THUNDERBIRD MOTOR FREIGHT LINES, INC., Plaintiff, v. PENN-DIXIE STEEL CORPORATION, Defendant.
• Court: U.S. District Court — Southern District of New York

10 B.R. 878 (1981)

In re PENN-DIXIE STEEL CORPORATION, Debtor.

THUNDERBIRD MOTOR FREIGHT LINES, INC., Plaintiff, v. PENN-DIXIE STEEL CORPORATION, Defendant.

No. 81 CIV. 18(MP), Bankruptcy No. 0 10472, Adv. No. 80 5159A.

United States District Court, S.D. New York.

April 6, 1981.

Fried, Frank, Harris, Shriver & Johnson by Ilene P. Karpf, New York City, for debtor.

Gerstein, Queller & Churchill by Robert Churchill, New York City, for plaintiff.

OPINION

MILTON POLLACK, District Judge.

This is an appeal from an order of Bankruptcy Judge Burton R. Lifland dated October 24, 1980 which denies the appellant's effort to impress a trust on receipts by the Debtor of freight charges incurred on the interstate shipment of steel through the facilities of the appellant. The Bankruptcy Judge held that the appellant was in the same position as any other unsecured creditor in respect of the Debtor's estate. In addition the Bankruptcy Judge granted the Debtor's motion to recover $2,977.16 representing freight charges collected by the carrier, Thunderbird, from the Debtor's consignees on shipments made by the Debtor to the latter.

The findings of fact made by the Bankruptcy Judge are not shown to be clearly erroneous and based thereon the order of October 24, 1980 entered in the proceedings by the Bankruptcy Judge is affirmed substantially for the reasons expressed in the opinion of the Judge.

Penn-Dixie Steel Corporation, the Debtor, is engaged in the production of a diversified line of fabricated steel products. It filed a voluntary petition for reorganization under Chapter XI of the Bankruptcy Code, 11 U.S.C. §§ 101 et seq. on April 7, 1980.

Thunderbird Motor Freight Lines, Inc. is in the business of moving freight by truck and is a duly licensed class one common carrier whose operations are subject to the provisions of the Interstate Commerce Act, 49 U.S.C. §§ 10101 et seq., which, among other things, establishes procedures for fixing shipping rates.

Prior to the filing of its petition Penn-Dixie utilized Thunderbird to transport substantial quantities of raw materials to its plant in Indiana which were shipped on a "collect" basis, and to transport finished steel products from its plant to third party consignee/customers, which were shipped on a "prepaid" basis. By custom in the trucking industry Thunderbird billed Penn-Dixie directly for freight charges after the goods were delivered. Penn-Dixie paid these charges from its general funds. Penn-Dixie billed...