A recent bankruptcy court decision from the influential Southern District of New York permitted a debtor to reject executory contracts with midstream gathers as an exercise of sound business judgment. In In re Sabine Oil & Gas Corporation, the court issued an advisory ruling in which it determined that certain provisions of the rejected contracts were not covenants that ran with the land, and thus could be rejected thereby relieving the debtor of a financial hardship.

The City of Harrisburg, Pennsylvania—the state's capital—filed for bankruptcy under Chapter 9 of the United States Bankruptcy Code on Wednesday October 12, 2011, indicating that it owed fewer than 50 creditors more than $545 million.

The company sits at the apex of the Singapore-headquartered Otto Marine Group, which has some 70 subsidiaries, associate companies and indirect subsidiaries, employing more than 622 employees worldwide. The Otto Marine Group is in the business of investment holding, construction, repair and servicing of vessels, chartering and leasing of vessels, and offshore services. The sole director and effective shareholder of Otto Marine is Malaysian tycoon Datuk Seri Yaw Chee Siew.

For companies with an appetite for strategic business growth rather than divestment, buying assets from insolvent companies is a particular avenue of opportunity. For example, in the current market, there may be opportunities to purchase oil & gas assets from companies that have not been able to survive the prolonged low oil price. Corporate Partner, Philip Mace, provides his top 'legal tips' for purchasing assets from, in this example, an English administrator of a company.

The recent further dip in oil price has placed even more pressure on the costs paid by Operators to Contractors, and also how much reliance Contractors can place on an Operator's promise to pay.

The slide and volatility in the oil price over the past few months has been dramatic and whilst many companies will be well positioned to weather the current climate, it has  already become clear that there are some players in the industry for whom insolvency is a very real  risk.

With the current financial difficulties faced by the oil & gas industry, directors of companies incorporated in England and Wales must be mindful of their duties and responsibilities to the company as well as the potential personal liability that could arise from breaching those duties and responsibilities in the context of an insolvency.

Who qualifies as a director?

U.S. Bankruptcy Judge Dennis Montali recently ruled in the Chapter 11 case of Pacific Gas & Electric (“PG&E”) that the Federal Energy Regulatory Commission (“FERC”) has no jurisdiction to interfere with the ability of a bankrupt power utility company to reject power purchase agreements (“PPAs”).

The chapter 11 case of Energy Future Holdings (“EFH” or “Debtors”) roared back to life this month.

U.S. Bankruptcy Judge Shelley Chapman ruled last week in the chapter 11 case of Sabine Oil & Gas that Sabine could utilize the U.S.