Appeals court denies Mirant's request to reject Pepco contracts

By Jeff Pines

Washington, Aug. 5 - The 5th U.S. Circuit Court of Appeals ruled Mirant Corp. cannot reject its contracts with Pepco, which provides electricity to businesses and consumers in the metropolitan Washington area.

The court found that the district court has the authority to rule on the matter but that a contract for electricity is unique, so the court should think about applying a more rigorous standard than using the business judgment standard used by bankruptcy courts.

The ruling stated, "Use of the business judgment standard would be inappropriate in this case because it would not account for the public interest inherent in the transmission and sale of electricity."

The ruling may not be the last one on this case. Mirant, Pepco and the Federal Energy Regulatory Commission and others are pursuing various legal options, Pepco said.

Mirant, an Atlanta-based energy company, filed for bankruptcy on July 14, 2003. Its Chapter 11 case number is 03-46590.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.