11 U.S.C. § 366

Utility service

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(a) Except as provided in subsections (b) and (c) of this section, a utility may not alter, refuse, or discontinue service to, or discriminate against, the trustee or the debtor solely on the basis of the commencement of a case under this title or that a debt owed by the debtor to such utility for service rendered before the order for relief was not paid when due.(b) Such utility may alter, refuse, or discontinue service if neither the trustee nor the debtor, within 20 days after the date of the order for relief, furnishes adequate assurance of payment, in the form of a deposit or other security, for service after such date. On request of a party in interest and after notice and a hearing, the court may order reasonable modification of the amount of the deposit or other security necessary to provide adequate assurance of payment.(c)(1)(A) For purposes of this subsection, the term “assurance of payment” means—(i) a cash deposit;(ii) a letter of credit;(iii) a certificate of deposit;(iv) a surety bond;(v) a prepayment of utility consumption; or(vi) another form of security that is mutually agreed on between the utility and the debtor or the trustee.(B) For purposes of this subsection an administrative expense priority shall not constitute an assurance of payment.(2) Subject to paragraphs (3) and (4), with respect to a case filed under chapter 11, a utility referred to in subsection (a) may alter, refuse, or discontinue utility service, if during the 30-day period beginning on the date of the filing of the petition, the utility does not receive from the debtor or the trustee adequate assurance of payment for utility service that is satisfactory to the utility.(3)(A) On request of a party in interest and after notice and a hearing, the court may order modification of the amount of an assurance of payment under paragraph (2).(B) In making a determination under this paragraph whether an assurance of payment is adequate, the court may not consider—(i) the absence of security before the date of the filing of the petition;(ii) the payment by the debtor of charges for utility service in a timely manner before the date of the filing of the petition; or(iii) the availability of an administrative expense priority.(4) Notwithstanding any other provision of law, with respect to a case subject to this subsection, a utility may recover or set off against a security deposit provided to the utility by the debtor before the date of the filing of the petition without notice or order of the court.(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2578; Pub. L. 98–353, title III, § 443, July 10, 1984, 98 Stat. 373; Pub. L. 109–8, title IV, § 417, Apr. 20, 2005, 119 Stat. 108; Pub. L. 116–260, div. FF, title X, § 1001(h), Dec. 27, 2020, 134 Stat. 3221.)Historical and Revision Noteslegislative statements

Section 366 of the House amendment represents a compromise between comparable provisions contained in H.R. 8200 as passed by the House and the Senate amendment. Subsection (a) is modified so that the applicable date is the date of the order for relief rather than the date of the filing of the petition. Subsection (b) contains a similar change but is otherwise derived from section 366(b) of the Senate amendment, with the exception that a time period for continued service of 20 days rather than 10 days is adopted.

senate report no. 95–989

This section gives debtors protection from a cut-off of service by a utility because of the filing of a bankruptcy case. This section is intended to cover utilities that have some special position with respect to the debtor, such as an electric company, gas supplier, or telephone company that is a monopoly in the area so that the debtor cannot easily obtain comparable service from another utility. The utility may not alter, refuse, or discontinue service because of the nonpayment of a bill that would be discharged in the bankruptcy case. Subsection (b) protects the utility company by requiring the trustee or the debtor to provide, within ten days, adequate assurance of payment for service provided after the date of the petition.

Editorial NotesAmendments

2020—Subsec. (d). Pub. L. 116–260, § 1001(h)(2), struck out subsec. (d) which read as follows: “Notwithstanding any other provision of this section, a utility may not alter, refuse, or discontinue service to a debtor who does not furnish adequate assurance of payment under this section if the debtor—

“(1) is an individual;

“(2) makes a payment to the utility for any debt owed to the utility for service provided during the 20-day period beginning on the date of the order for relief; and

“(3) after the date on which the 20-day period beginning on the date of the order for relief ends, makes a payment to the utility for services provided during the pendency of case when such a payment becomes due.”

Pub. L. 116–260, § 1001(h)(1), added subsec. (d).

2005—Subsec. (a). Pub. L. 109–8, § 417(1), substituted “subsections (b) and (c)” for “subsection (b)”.

Subsec. (c). Pub. L. 109–8, § 417(2), added subsec. (c).

1984—Subsec. (a). Pub. L. 98–353 inserted “of the commencement of a case under this title or” after “basis”.

Statutory Notes and Related SubsidiariesEffective Date of 2020 Amendment

Pub. L. 116–260, div. FF, title X, § 1001(h)(2), Dec. 27, 2020, 134 Stat. 3221, provided that the amendment made by section 1001(h)(2) is effective on the date that is 1 year after Dec. 27, 2020.

Effective Date of 2005 Amendment

Amendment by Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title.

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title.

Notes of Decisions

Cited in 151 cases (3 in the last 5 years), 1979–2026 · leading case: Hennen v. Dayton Power & Light Co. (In Re Hennen)

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Hennen v. Dayton Power & Light Co. (In Re Hennen) (1982) ohsb · cites it 19× “00 security for payment of Plaintiffs’ current utility service and from discontinuing Plaintiffs’ utility service so long as the bills for said service are timely paid, and (2) in lieu of the requested deposit, order Plaintiffs’ Chapter 13 Trustee-inter-venor to provide DP&L…”

Begley v. Philadelphia Electric Co. (In Re Begley) (1984) paed · cites it 9× “Since 1981, the PUC has taken the position that section 366 of the Bankruptcy Code, 11 U.S.C. § 366 , preempts PUC jurisdiction to require utilities to negotiate amortized payment agreements when the utility’s customer has filed a petition in bankruptcy.”

Montalvo v. Autoridad de Acueducto y Alcantarillados (In re Montalvo) (2015) prb · cites it 8× “§ 525 by refusing to reconnect the water service on account of a dischargeable debt; and (ii) PRASA’s refusal of the Debtor’s surety bond and the continued demand for a cash deposit of $500 constitutes a violation of 11 U.S.C. § 366 . Also, on said date, the Plaintiff filed an…”

Weisel v. Dominion Peoples Gas Co. (In Re Weisel) (2009) pawb · cites it 8× “Based on the representations made at the preliminary hearing on May 28, 2008, the Court issued a Pretrial Scheduling Order confirming the Parties’ agreement that the only issue in the case was the legal one of whether Dominion had appropriately complied with its duties under 11…”

In Re Utica Floor Maintenance, Inc. (1982) nynd · cites it 7× “Under the Bankruptcy Code Section 366, 11 U.S.C. § 366 , a utility is required to continue providing service to a Title 11 debtor provided the debtor furnishes “adequate assurance of payment” for its post-petition utility bills.”

Whittaker v. Philadelphia Electric Co. (In Re Whittaker) (1988) paeb · cites it 7× “We hold herein that the utility violated 11 U.S.C. § 366 (a) when it refused to restore the service of a customer, which has been terminated pre-petition, upon request and without the pre-payment of a deposit as adequate assurance of future payment.”

Marion Steel Co. v. Ohio Edison Co. (In Re Marion Steel Co.) (1983) ohnb · cites it 6× “Steel Company’s (hereafter “Debtor”) motion for a preliminary injunction against the Ohio Edison Company (hereafter “Ohio Edison”) enjoining the termination of electrical service to Debtor’s Marion, Ohio steel manufacturing operation, Ohio Edison’s motion to dissolve a temporary…”

Sharon Steel Corporation v. National Fuel Gas Distribution Corporation, Intervenor: James W. Toren, Trustee (1989) ca3 · cites it 2× “1 Four days after Sharon filed for bankruptcy, National Fuel requested Sharon to furnish adequate assurance of payment pursuant to 11 U.S.C. § 366 (1982). At the bankruptcy court hearing on April 30,1987, Sharon stipulated that it would provide National Fuel with adequate…”

Allen v. Philadelphia Electric Co. (In Re Allen) (1987) paeb · cites it 7× “§ 348 , pertaining to the effect of the conversion of a case from one chapter to another, and 11 U.S.C. § 366 , pertaining to the rights and obligations of Debtors seeking to retain utility service after filing bankruptcy.”

Aponte v. Aungst (In Re Aponte) (1988) paeb · cites it 3× “A utility company could not cancel services under 11 U.S.C. § 366 11 without affording debtor certain protections.”

In Re Tashjian (1987) paeb · cites it 3× “y a condominium unit owners’ association (hereinafter referred to as “the Association”) seeking a variety of relief against a Chapter 13 Debtor who is a resident of the condominium, including (1) relief from the automatic stay to pursue “foreclosure” on a state-law-created lien…”

In Re Coastal Dry Dock & Repair Corp. (1986) nyeb · cites it 3× “§ 365 (d)(3), timely perform its obligations under that lease; and ii) BNYDC’s request for an order directing the Debtor to forthwith provide BNYDC, pursuant to 11 U.S.C. § 366 , with adequate assurance of payment of electricity services to Consolidated Edison Company in the…”

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