On Oct. 28, 2020, the U.S. Bankruptcy Court for the Southern District of Texas delivered a key ruling affecting: (1) purchase and sale agreements for produced gas and severed minerals; and (2) agreements with “exclusive remedy” provisions and liquidated damage clauses. See Mem. Op., In re: Chesapeake Energy Corp., et al., Cause No. 20-33233 (Bankr. S.D. Tex. Oct. 28, 2020).

The good news is that public works construction projects for municipalities are projected to remain a major sector of construction activity for the foreseeable future. The not-so-good news is that municipal bankruptcy filings are on the rise, and they are likely to increase. The issues facing parties under contract with a municipality when it files for bankruptcy protection are playing out nationally in places like Stockton, California, and Detroit, Michigan.