Reedsburg Util. Comm'n v. Grede Foundries, Inc., No. 10-2509 (7th Cir. 2011)Annotate this Case
The Wisconsin smelting plant owed more than $1.3 million in delinquent utility charges to the local municipal utility when it filed for Chapter 11 bankruptcy. Months later, despite the automatic stay, the utility implemented a process pursuant to sections 66.0809 and 66.0627, Wisconsin Statutes and local ordinance, under which unpaid utility bills become a lien against the property. The bankruptcy court and district court found that none of the exceptions to the automatic stay applied to the debt, which constituted more than one-third of the utility's operating revenue. The Seventh Circuit affirmed, holding that no exception to the stay applied. The utility did not obtain a pre-petition security interest in the plant property by providing service or billing. The utility bills were not a tax or special assessment.