The Impact of Airline Bankruptcies on Airports (2009) / Chapter Skim
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Pages 44-50
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46 prohibits a carrier from granting an interest in PFCs to a third party.488 Enforcement of § 40117(m) has been raised in at least one proceeding where the Chapter 11 airline took the position that the airports could not bring a motion to compel during the bankruptcy proceeding, arguing that action remained the sole purview of the FAA and USDOT.489 Although this issue was not fully litigated, the motions to compel were in effect granted via a consent order issued by the bankruptcy court.490 Nonetheless, the statute and implementing regulations do not describe any enforcement responsibilities, and the FAA has taken the position that it cannot address this issue in its regulations without additional legislative authority.491 Thus far it appears that the issue of how the compensation requirements of 49 U.S.C.
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47 of credit. There are a number of specific factors leading to a finding of no true lease in bankruptcy.
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48 (important if there is a question of whether a contract exists and so can be assumed or rejected under § 365)
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49 B Mitigating Losses It is advisable to conduct a prebankruptcy assessment; that is, to evaluate all airport agreements to determine the effect that airline bankruptcies would have on those agreements.
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50 under § 502(b)
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51 use cash collateral, receive an extension of time to assume a lease, etc., may be challenged on the ground that the debtor has failed in some obligation, such as paying postpetition rent. Also, look out for motions that could include PFCs.
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52 protection. However, provisions purporting to terminate or modify an airline's interest in property because of bankruptcy filing are likely to be held to violate § 363(l)
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