Electricity Sales Qualify For Priority Claims: Judge

Law360, New York (April 12, 2010, 2:38 PM EDT) -- A bankruptcy judge has held that electricity is a good under part of the U.S. Bankruptcy Code, entitling Constellation NewEnergy Inc. to a $280,000 administrative priority claim against the bankruptcy estate of Erving Industries Inc., a paper manufacturer and recycler.

Judge Henry J. Boroff of the U.S. Bankruptcy Court for the District of Massachusetts issued the ruling Wednesday, disagreeing with two previous bankruptcy court decisions that held creditors are not entitled to administrative priority claims for certain electricity sales.

At issue was whether the electricity Constellation...
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