Challenging Midstream Contracts in the Wake of 'Sabine'
Kathryn A. Coleman and Anson B. Frelinghuysen of Hughes Hubbard & Reed write: 'Sabine' set the stage for several heated battles over a debtor's ability to reject midstream contracts, and, in the process, introduced concern regarding midstream companies' cash flows. These conflicts arise at the intersection of the core bankruptcy tool of contract rejection, centuries-old state property law, and how the financing that supported the recent expansion of domestic oil and gas production was structured. The authors discuss the details of these conflicts and how the parties have achieved either resolution or the ability to move on despite the continuing lack of definitive answers in every case.
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