Is electricity a good for purposes of establishing an administrative priority claim under Section 503(b)(9) of the U.S. Bankruptcy Code? That is the question that U.S. Bankruptcy Judge Christopher Sontchi of the District of Delaware answers in In re NE Opco, Case No. 13-11483 (CSS) (Bankr. D. Del. Nov. 1, 2013). Faced with a split in authority from other jurisdictions and no written opinions on the subject in the U.S. Court of Appeals for the Third Circuit, Sontchi, in a fascinating opinion, holds that electricity is not a good for purposes of Section 503(b)(9).
The NE Opco case involved a utility provider’s claim for administrative priority status for electricity and natural gas it delivered to the debtors in the weeks before they filed for bankruptcy. Section 503(b)(9) provides for the allowance of an administrative priority claim if the claimant establishes: (1) the claimant sold goods to the debtor; (2) the goods were received by the debtor within 20 days prior to filing; and (3) the goods were sold to the debtor in the ordinary course of business. There was no dispute that the utility delivered electricity to the debtors in the ordinary course of business within the 20-day period. The parties’ disagreement concerned whether electricity is a good for purposes of Section 503(b)(9).
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
