• Governmental Units Not Forward Contract Merchants
  • March 31, 2004
  • Law Firm: Sutherland Asbill & Brennan LLP - Washington Office
  • A legal decision arising out of the Mirant bankruptcy finds that Federal, State, and Municipal governmental entities (e.g., Bonneville Power, TVA, CDWR) are not forward contract merchants under the Bankruptcy Code. What this means is that they cannot terminate their physical power and gas contracts if their counterparty files for bankruptcy, unless the court specifically allows the termination.