Document Type
Research Memorandum
Publication Date
2024
Abstract
(Excerpt)
Under section 503(b)(9) of title 11 of the United States Code (the "Bankruptcy Code"), administrative expenses should be allowed for "the value of any goods received by the debtor within 20 days before the date of commencement of a case under this title in which the goods have been sold to the debtor in the ordinary course of such debtor’s business." Courts uniformly analyzed the Uniform Commercial Code’s (the "UCC") definition of “goods” in the absence of a definition in the Bankruptcy Code. However, courts are split on whether electricity is a good.
This memorandum will explore the courts' approaches and reasoning in utilizing the UCC to interpret whether electricity constitutes "goods." Part I analyzes the courts' reasoning in applying UCC’s definition of "goods" for section 503(b)(9) and discusses what is a good. Part II examines the bankruptcy and district courts' approaches in concluding that electricity is not a good because it is not movable at the time of consumption. Part III analyzes the courts' conclusion that electricity is a good because it is identifiable and movable.