In re Circuit City Stores, Inc.

In re Circuit City Stores, Inc.

Opinion

 [*532]  MEMORANDUM OPINION

This is a Chapter 11 case filed by a national retailer. The Debtors have objected to a number of administrative claims filed by creditors under § 503(b)(9) of the Bankruptcy Code as not involving "goods" within the meaning  [**2] of the section and, hence, should be reclassified as general unsecured claims. Hearing was conducted on August 27, 2009 (the "Hearing"), to consider the Debtors' request for partial summary judgment. The Debtors asked the Court to determine two legal issues: first, what definition of "goods" should be used to interpret § 503(b)(9) of the Bankruptcy Code; and second, whether the "predominate purpose test" should be used to determine whether a claim will be treated as an administrative claim under the section. The Court concludes that ] the definition of "goods" set forth in the Uniform Commercial Code (the "UCC") should be employed in fashioning a federal definition for that term in § 503(b)(9). The Court also concludes that ] the "predominate purpose test," developed and applied by the majority of courts to determine whether the UCC is applicable to hybrid contracts calling for the delivery of both goods and services, should be used to determine whether a claim involves the selling of goods and is, therefore, entitled to an administrative priority under § 503(b)(9) of the Bankruptcy Code.

Jurisdiction

The Court has subject-matter jurisdiction of this contested matter pursuant to 28 U.S.C. §§ 157  [**3] and 1334 and the general order of reference from the United States District Court for the Eastern District of Virginia dated August 15, 1984. This is a core proceeding under 28 U.S.C. § 157(b)(2)(A), (B) and (O). Venue is appropriate in this Court pursuant to 28 U.S.C. § 1409.

Factual and Procedural Background

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