The Missouri Commercial Receivership Act (MCRA), passed by the Missouri legislature and just signed into law by Governor Nixon, becomes effective Aug. 28, 2016. It expands, clarifies and fleshes out the existing minimal receivership statute. The MCRA (Sections 515.500 through 515.665 of MO Senate Bill No. 578) outlines a new standardized system for receivership administration under the auspices of the Missouri courts.

In most financing transactions, particularly project finance transactions, lenders seek to obtain security over all of a borrower’s assets. One crucial asset that sometimes does not get sufficient attention is insurance proceeds. Lenders are accustomed to ensuring access to the borrower’s insurance coverage through “additional insured” or “loss payee” provisions.

Nearly every day a different E&P company makes an announcement that indicates the company is facing financial distress, insolvency or bankruptcy.  Many of these companies are Operators under Joint Operating Agreements and with each announcement there are likely Non-Operators concerned about the impact these events will have on their non-operated working interests.  Non-Operators should understand their JOA rights and options when their Operator becomes distressed.

GAO has issued a report which noted the FDIC and Federal Reserve have developed separate but similar review processes for determining whether a resolution plan, often referred to as a “living will,” is “not credible” or would not facilitate a company’s orderly resolution under the Bankruptcy Code.

On remand by the First Circuit Court of Appeals, the Federal District Court of Massachusetts found Sun Capital Partners III, LP (“Sun Fund III”) and Sun Capital Partners IV, LP (“Sun Fund IV, and together with Sun Fund III, the “Sun Funds”) liable for the withdrawal liability of Scott Brass, Inc.

This alert describes certain information regarding the recently filed bankruptcy case of Emerald Oil, Inc. and is an example of current developments in the energy industry.

Emerald Oil, Inc. and its subsidiaries (collectively referred to as the “Debtors”) filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code on March 22, 2016 in the District of Delaware, pursuant to which the Debtors plan to sell substantially all of their assets (the “Assets”) in a possible auction in July 2016.

In a decision entered yesterday afternoon, Judge Shelley Chapman of the United States Bankruptcy Court for the Southern District of New York authorized Sabine Oil & Gas Corporation to reject certain midstream contracts under Section 365(a) of the Bankruptcy Code and, critically, made a non-binding holding that Sabine’s obligations under these contracts were not “covenants running with the land” under Texas law.

Midstream Companies face increased risk with financially distressed E&P companies

With the steep collapse of oil and gas prices in the last eighteen months, dozens of exploration and production companies have declared bankruptcy and many more companies are expected to file for bankruptcy protection unless prices rebound dramatically. As the prospect of further bankruptcies looms, it is important for parties to understand how to adequately protect their security interests and the nature of competing liens that could prevent them from fully realizing on the value of the collateral securing their counterparty’s obligations.

Securities Alert February 1, 2016 E&P Restructurings: Focus on Uptiering Transactions By: Jennifer Wisinski, Paul Amiel, Bill Nelson and Kristina Trauger Times are tough, very tough, for many mid-cap and small-cap exploration and production (“E&P”) companies. Crude oil prices have fallen from more than $100/barrel in July 2014 to a twelve-year low of less than $30/barrel in January 2016. Natural gas prices are at a three-year low. The growing consensus is that depressed prices will experience a slow recovery that may continue into the 2020s.