National Airlines is asking a Las Vegas court to force one of the bankrupt US air carrier's investors to extend a US$16 million letter of credit (L/C). This would allow National to receive immediate payment from tickets sold on credit cards.

Casino operator Harrah's Entertainment Inc. - which has already written down its investment of nearly US$40 million in National - says it wants to close its credit line. National however has asked the court to put a restraining order on Harrah's to extend the L/C for ten days while the ailing airline negotiates a rescue package with a potential buyer.

Financier Carl Icahn is reportedly the only party interested in National. He is looking for a reliable source of cheap air tickets to sell through his Lowestfare.com web site, which used to access discounted Trans World Airlines tickets until that carrier filed for bankruptcy and subsequently acquired new owners.

If the L/C expires, the proceeds of tickets sold on credit card would go towards repaying whatever amount is drawn down on the Harrah's credit line, thereby adversely affecting National's financial and negotiating positions.

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