The US Bankruptcy Court for the Southern District of New York has issued a ruling in a chapter 11 case that could have a significant  impact on future restructurings in the oil and gas industry.

On March 8, 2016,  in the case of Sabine Oil and Gas Corp., Judge Shelley Chapman ruled that Sabine could reject certain pipeline and gas gathering agreements with two midstream gathering pipeline companies.

Can Gathering Agreements Be Rejected as Executory Contracts?

Decision establishes framework for future rulings that covenants in midstream agreements do not run with the land.

Executive Summary New York bankruptcy judge allows Sabine Oil & Gas to reject gathering agreements over the objections of midstream companies, finding that the covenants do not run with the land.

(Bankr. E.D. Ky. Mar. 7, 2016)

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

Physical Supplier Denied Maritime Lien

A federal court in the United States recently held that a physical supplier of bunkers was not entitled to a maritime lien against a vessel.  Valero Marketing and Supply Co. v. M/V ALMI SUN, No. 14 Civ. 2712 (NJB) (E.D. La. decided Dec. 28, 2015 and Feb. 8, 2016).  The Order was the first to apply United States law and directly address the issue in the context of O.W. Bunker's bankruptcies.

(6th Cir. B.A.P. Mar. 3, 2016)

(7th Cir. Mar. 4, 2016)

For years, it was generally accepted that mortgage creditors and bankruptcy trustees could assert the status of a bona fide purchaser and treat a defectively notarized mortgage as if that mortgage did not exist.  On February 16, 2016, our Supreme Court provided clarity regarding the legal effects of R.C. §1301.401 and provided protection to lenders regardless of whether their mortgages were defective.