In re: Mirant Corporation, et al., Debtors. Sacramento Municipal Utility District, Plaintiff, vs. Mirant Americas Energy Marketing, LP, Defendant, 318 B.R. 377

Summary

The issue before the court was whether the creditor, who was a party to an executory contract with a the debtor, could recoup, from amounts due for the debtor's post-petition performance, a claim arising from the debtor's rejection of the contract. The court was unable to find cause to invoke its equity powers. The post-petition payment was made for gas actually delivered. The gas was purchased with post-petition dollars and, dollar for dollar, would have reduced the bankruptcy estate if recoupment was permitted. Denial of recoupment would not leave the creditor paying twice for the same performance or the debtor receiving a windfall through double-dipping. The debtor received no benefit like a pre-payment; the benefit to the debtor was in conversion of the value of its contractual obligations to the creditor into an unsecured claim. That the claim should receive unsecured treatment was entirely consistent with Congress's purposes, and the relief the creditor could reasonably have ...