Electricity Still Not a Good Under Section 503(b)(9)
With this ruling, six bankruptcy court decisions from the District of Oregon, the Eastern District of Kentucky, the District of Delaware, the Northern District of Texas, and the Southern District of New York have held that electricity is not a "good" and does not qualify under Section 503(b)(9). The ruling can make the differences between being paid in full as opposed to pennies (if any) on the dollar.
June 08, 2023 at 11:35 AM
6 minute read
BankruptcyFurther entrenching a nearly two-decade-old split, Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York on May 15, found that electricity is not a "good" under Section 503(b)(9) of the U.S. Bankruptcy Code. See In re Sears Holdings, No. 18-23538 (SHL), 2023 Bankr. LEXIS 1280, AT 6 (Bankr. S.D.N.Y. May 15, 2023). Enacted in 2005, Section 503(b)(9) dramatically changed the bankruptcy claim priority scheme by creating an administrative expense claim for the value of any goods received by the debtor within 20 days before the commencement of the bankruptcy case. Since then, numerous claims asserted by utility providers for unpaid electricity charges have been litigated, resulting in a split among bankruptcy courts. Currently, six bankruptcy court decisions from the District of Colorado, the District of Massachusetts, the District of Montana, the Western District of Wisconsin, and the District of Puerto Rico, have held that electricity is a "good." With this ruling, six bankruptcy court decisions from the District of Oregon, the Eastern District of Kentucky, the District of Delaware, the Northern District of Texas, and the Southern District of New York have held that electricity is not a "good" and does not qualify under Section 503(b)(9). The ruling can make the differences between being paid in full as opposed to pennies (if any) on the dollar.
This content has been archived.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
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Law Firms Mentioned
Trending Stories
- 1Wine, Dine and Grind (Through the Weekend): Summer Associates Thirst For Experience in 'Real Matters'
- 2The Law Firm Disrupted: For Big Law Names, Shorter is Sweeter
- 3The 'Biden Effect' on Senior Attorneys: Should I Stay or Should I Go?
- 4BD Settles Thousands of Bard Hernia Mesh Lawsuits
- 5'You Are Not Alone': 120 Sex Assault Victims Plan to Sue Sean 'Diddy' Combs
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250