Lightfoot v. MXEnergy Electric, Inc. (In Re MBS Management Services, Inc.), 690 F.3d 352

MBS Management Services, Inc. (MBS) managed numerous apartment complexes and entered a long-term electricity supply arrangement.
In 2005, MBS and Vantage Power Services, LP agreed to buy full electric requirements for specified properties at a fixed rate for 24 months.
In 2007, Vantage sold its electrical service agreements to MXEnergy Electric, Inc. (MX).
In August 2007, MBS paid MX $156,345.93 to cover past-due electric bills for its affiliates.
MBS filed a Chapter 11 bankruptcy on November 5, 2007; the Trustee sought avoidance of the 2007 payment as a preference under §547(b).
The defenses argued the payments were exempt as settlement payments under the forward-contract exemption in §546(e).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the agreement was a forward contract under §101(25).	Trustee: no forward-contract features; lacks quantity and delivery specifics.	MX: contract falls within forward-contract definition; exempt under §546(e).	Agreement is a forward contract; §546(e) applies.
Whether the payments were settlement payments exempt from avoidance.	Trustee: payments are avoidable preferences despite forward-contract label.	MX: payments were settlement payments by a forward-contract merchant per §546(e).	Payments are exempt settlement payments under §546(e).
Whether the trial court properly admitted Mayer's expert testimony on forward contracts.	Trustee: Mayer’s expertise should be excluded as improper on contract legality.	MX: Mayer’s expertise is valid; reliability standards suitably applied.	Expert testimony admitted; it does not alter the legal conclusion.

In re Olympic Natural Gas, 294 F.3d 737 (5th Cir. 2002) (defines forward contracts within the Code and rejects narrowing interpretations)
In re National Gas Distributors, LLC, 556 F.3d 247 (4th Cir. 2009) (disallows restrictive readings of forward-contract definitions)