UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
TRACY DALE DAMRON
MARLENE LOUISE DAMRON
DEBTORS CASE NO. 84-00475
OPINION AND ORDER
This matter is before the Court on the trustee's Objection to Claims of Union Light, Heat & Power Co. ("ULH & P"). ULH & P has filed its response. This Court has jurisdiction of this matter pursuant to 28 U.S.C.'1334(b); it is a core proceeding pursuant to 28 U.S.C. '157(b)(2)(B).
The debtors filed a Chapter 13 petition in this Court on October 17, 1984. Their plan was confirmed on February 8, 1985. They moved this Court to convert their Chapter 13 petition to a Chapter 7 petition on April 29, 1987. UHL & P had timely filed a proof of claim on February 15, 1985, in the amount of $215.37 for unpaid, pre-petition gas and electric service. UHL & P acknowledges that its pre-petition claims are general unsecured claims.
UHL & P filed a further proof of claim on August 5, 1987, in the amount of $1038.25 for gas and electric service provided to the debtors during the pendency of their Chapter 13 claim and prior to the conversion of their case to Chapter 7. UHL & P maintains that this post-petition, pre-conversion claim is an administrative, priority claim pursuant to 11 U.S.C.'503(b). UHL & P argues that the gas and electric services provided to the debtors were "entirely or substantially for the benefit of the Debtors' livelihood, and as such are entitled to administrative expense priority under Bankruptcy Code '503(b) as beneficial to the Debtors' estate." (See UHL & P's Response). UHL & P cites In re Watts, 85 B.R. 470 (Bkrtcy.S.D.Ohio 1988), in support of its position.
The Watts case does indeed support UHL & P's position as the court therein held that a claim by a utility may be characterized as a Chapter 13 administrative expense entitled to priority pursuant to 11 U.S.C.'507 as modified by 11 U.S.C. '726(b). In agreeing with the utility company that "the provision of utilities is essential so that debtors can live and generate the income necessary to fund the Chapter 13 plan", the court reasoned as follows:
Where a Chapter 13 debtor is not able to meet its obligations for utilities, it means that the debtor is unable to perform his undertaking with the court in its Chapter 13 plan. One of the foundations for confirmation of the Chapter 13 plan is the acceptance by the bankruptcy judge and the Chapter 13 trustee that the payment undertaken is feasible, considering the items set forth in the budget provided by the debtor. The cost of utilities is one such item in the budget. If the debtor is not making his payment to a utility, the entire case is in jeopardy.
This Court agrees with the reasoning in Watts, and, accordingly, it is the opinion of this Court that the trustee's Objection to Claims should be, and it hereby is, OVERRULED.
This is a final order entered this ___ day of March, 1991.
Charles L.J. Freihofer, Esq., Trustee
T. Scott Bucey, Esq.