Circuit Court Cuts Cable Out Of Bankruptcy Code
The Fifth Circuit Court recently ruled in Darby versus Time Warner Cable, Inc. that cable television is not considered a utility as it is defined in the Bankruptcy Code. This means that a debtor's cable television service will not be protected after a he or she files for bankruptcy.
The court reasoned that cable is not a necessity like electricity, water, sewer and telephone which means it should not be considered a utility protected under section 366 of the Bankruptcy Code. Critics disagree with the court's decision arguing that the 2005 Bankruptcy Code provides this protection simply because a debtor usually has no other utilities to choose from, not because the utilities are a necessity.