In Re America West Airlines
United States Bankruptcy Court for the District of Arizona
142 B.R. 901 (1992)
- Written by Philip Glass, JD
Facts
America West Airlines, Inc. (West) (debtor) filed for Chapter 11 bankruptcy on June 26, 1991. The United States trustee (trustee) appointed an unsecured creditors’ committee (committee) on July 10, 1991. This committee included Kawasaki Leasing International, Ltd. (Kawasaki) as a committee member. Over time, Kawasaki became a postpetition financier with priority status, with the ability to restrict some accounts’ usage and to sell West’s collateral with little notice. Thus, Kawasaki began to drift in self-interest from the rest of the committee members such that Kawasaki might benefit more from liquidating than from reorganizing West’s estate. The rest of the committee, believing that Kawasaki might find it challenging to act in West’s interest with the rest of the committee, voted unanimously to oust Kawasaki. Proof of the necessary or beneficial nature of Kawasaki’s membership was lacking. The trustee removed Kawasaki from the committee on February 25, 1992, after which Kawasaki moved for reappointment, claiming that the trustee acted arbitrarily or capriciously and abused its discretion. The bankruptcy court heard this matter.
Rule of Law
Issue
Holding and Reasoning (Mooreman, C.J.)
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