Judge Cathy Seibel

The A&P supermarket chain sought Chapter 11 bankruptcy relief on Dec. 12, 2010. It also sought bankruptcy court approval to deposit $7.45 million—two weeks of electricity service by certain utilities—into an escrow account (the motion). Consolidated appeals by four utilities challenged the motion’s Jan. 12, 2011, grant. District court affirmed the bankruptcy court’s order. It rejected appellant utilities’ claim that the bankruptcy court did not follow directives in 11 USC §366 when it decided that the $7.45 million deposit adequately assured payment for future utility services. Neither the bankruptcy court’s reading of §366(c), nor its decision that the two weeks’ deposit was adequate—rather than the two-month deposit the utilities claimed more appropriate—were clearly erroneous. Persuaded by In re Crystal Cathedral Ministries, district court found no error in the bankruptcy court’s finding that the so called Adequate Assurance Account was a cash deposit or akin to a letter of credit under the Bankruptcy Code, and that there was no persuasive reason why the utility providers, rather than an escrow agent, needed to control the account.