Citicorp North America, Inc. v. Murray (In Re Chicago, Missouri & Western Railway Co.)

MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

Daniel R. Murray, the Trustee of the Debtor, the Chicago, Missouri & Western Railway Company (“CM & W” or “Railroad”), applied to the Bankruptcy Court for permission to borrow up to approximately $14 million from agencies of the State of Illinois. The Trustee proposed to secure these loans by granting the state agencies a lien on the CM & W’s assets that was senior to the liens of other creditors. The CM & W’s primary creditors, Citicorp North America, Inc. and Heller Financial, Inc. (“Lenders”), objected to these so-called “priming” or…