Southland Can Reject Gas Gathering Deal In Ch. 11

By Vince Sullivan (November 13, 2020, 5:56 PM EST) -- A Delaware bankruptcy judge ruled Friday that bankrupt gas driller Southland Royalty can reject a gas gathering agreement with affiliates of The Williams Cos. and sell the operating assets subject to the deal free and clear of any obligations under the contract because it is not a covenant that runs with the land.

In the opinion, U.S. Bankruptcy Judge Karen B. Owens said the issue of whether contracts dealing with the production, gathering and transportation of oil and natural gas products can be rejected in bankruptcy has drawn split decisions in different jurisdictions, but determined that Southland and Wamsutter LLC never...

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