During the deregulation of the airline industry, a major carrier filed for Chapter 7, ceasing all operations and grounding all flights. Since we were a small and unsecured creditor and had no leverage to negotiate any collateral agreements with the airline for un-flown tickets, the airline would not respond to calls or certified mail.
The bankruptcy judge was presented documents outlining the conflict and obligations that the two companies shared. The judge stated that he wanted this settled outside of court because there were so many creditors lined up with larger sums owed to them. With the majority of their assets already claimed by other creditors, we appeared to be at the end of the line with no time or leverage left.
At the final hour before reporting to the bankruptcy judge, we discovered that their employee pension plan (EPP) was overfunded. I explained that given the relatively small amount we were asking for compared to other creditors, some of the excess from the EPP plan would satisfy our obligation. This solution demonstrated to the bankruptcy judge goodwill on the airline's part for settling with one of its creditors and left it money for other creditors as well. The court ordered that the funds could be awarded to us from this source and my company avoided a $10 million-plus loss.