Theodore W. Kheel and Raymond J. Scully, Intervening Claimants-Appellants v. Bethlehem Steel Company, a Corporation, Intervening Libelant-Appellee

This is an appeal from an order of the United States District Court for the District of Oregon upholding the claim of Bethelehem Steel Company (Bethlehem) for a preferred maritime lien against the S.S. SOUTHAMPTON in the amount of \ $36,691. The court ordered payment to 'Bethlehem of that sum out of the funds in the registry of the court derived from the sale of the vessel.

The appeal is brought by Theodore W. Kheel and Raymond J. Scully, trustees in proceedings under Chapter X of the Bankruptcy Act pending in the United States District Court for the Southern District of New York. One of the debtors in the Chapter X proceeding is Kulukundis Maritime Industries, Inc. (Kulukundis), the owner of the SOUTHAMPTON at the time she was libeled and sold in the Oregon proceedings. Appellants appeared in the Oregon proceedings to protest the interest of the general creditors of Kulukundis by contesting lien claims that were regarded as excessive or without merit, and by asserting a claim to any surplus remaining after payment of maritime liens.

Appellants do not deny that Bethlehem originally acquired a maritime lien against the SOUTHAMPTON for the reasons and in the amount claimed. But…