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GFI Wis., Inc. v. Reedsburg Util. Comm'n - No. 10-cv-388-bbc, 2010 U.S. Dist. LEXIS 122681 (W.D. Wis. Nov. 10, 2010)

Rule:

Electricity is movable, tangible and consumable, that it has physical properties, that it is bought and sold in the marketplace and thus, that it qualifies as a good for purposes of the Uniform Commercial Code and the Bankruptcy Code.

Facts:

On June 30, 2009, appellant GFI Wisconsin, Inc., formerly known as Grede Foundries, Inc., filed a Chapter 11 bankruptcy petition. Appellant owned several properties in Wisconsin that received electricity from appellees Reedsburg Utility Commission and Wisconsin Electric Power Company over a time period that included the 20 days before the petition date. On September 25, 2009, appellees submitted claims seeking administrative priority status under § 503(b)(9) for the value of the electricity they provided appellant during the 20-day period. The bankruptcy court allowed appellees to claim administrative priority status. On appeal, appellant argued that electricity was not a “good” within the meaning of § 503(b)(9), and thus, the bankruptcy court should have disallowed the claim.

Issue:

Was electricity a “good” within the meaning of § 503(b)(9), thereby justifying the bankruptcy court’s approval of the appellees’ claim?

Answer:

Yes.

Conclusion:

The court took into consideration the physical properties of electricity, including the fact that electricity was movable, and the parties' agreement under which the energy usage and consumption were determined by meter readings. The court posited that electricity was "personal chattel" that may be subject of larceny because it may be stored and conveyed may be transmitted through wires and the quantity of consumption is measurable.Taking all of these into consideration, the court concluded that electricity was a good under the Uniform Commercial Code definition and Bankruptcy Code § 503(b)(9), and therefore, it could be subjected to appellees’ claims.

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