In February of 1983 Pan American World Airways issued 100 million dollars of convertible secured notes. As security for these notes it put up three Boeing 747 SP aircraft, two 747-100 aircraft, and one McDonnell Douglas DC10-30. The appraised value of these aircraft was 157 million dollars. To the extent possible under the law, Pan American made these aircraft subject to the claims of the owners of the new notes. On default, the note holders would have the first claim on these aircraft, would have the right to repossess them outside of bankruptcy, and would have the right to the value of these assets or to the assets themselves in bankruptcy. At least in theory, the effect of the security agreement was to remove the six aircraft from the pool of assets that would have been available to the general creditors of Pan American had it gone into bankruptcy without granting such a security interest. To that extent at least, the general creditors of Pan American, whether they be owners of other Pan American debt securities, trade creditors, employees, or others, now apparently have diminished status just as the purchasers of the notes have enhanced claims.
White, James J. "Efficiency Justifications for Personal Property Security." Vand. L. Rev. 37 (1984): 473-508.