In Search Of The Meaning Of “Utility”

Law360, New York (February 23, 2007, 12:00 AM EST) -- Entities doing business with a customer that files for bankruptcy protection generally have the right to refuse to continue providing goods or services to the Chapter 11 debtor, unless such goods or services are covered by a continuing contract, in which case any forfeiture of the debtor’s rights under the agreement is generally prohibited to afford the debtor a reasonable opportunity to decide what to do with the contract.

Special rules, however, apply to utilities—without essential utility services, the debtor can neither reorganize nor obtain the...
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