MX Energy’s purchase of Catalyst approved

A federal bankruptcy judge approved the sale of Catalyst Energy on Wednesday.

The bankrupt gas marketing company will go to MX Energy, one of the largest retail energy companies in the country.

The court approved the sale one day before Catalyst was slated to lose its gas supply.

Catalyst fell as part of a chain reaction to last month’s Lehman Brothers collapse.

Its gas and gas supplier was Constellation Energy, which was a trading partner of Lehman’s.

Constellation stock tanked after Lehman collapsed, forcing itself to sell to Warren Buffet’s Berkshire Hathaway for a fraction of the price its stock commanded a few weeks before.

Constellation cut Catalyst’s credit line a few days later.

State law requires gas marketers to have a supply of credit adequate to pay for the gas its customers need.

Constellation had a special niche in Georgia’s market. It sold gas to immigrants and to those with poor or no credit.

By offering pre-paid gas plans, with customers paying for gas upfront, the company was able to offer riskier customers a lower-priced product than their only other alternative, which is the state’s regulated provider-of-last-resort.

The order approving sale assures that the prepaid customers will get their money back.

MX is paying about $1.5 million for Catalyt’s business, which is largely its customers.

As with any other marketer, the transferred Catalyst customers can switch from MX if they choose.