Section 363 Sales in Oil & Gas Bankruptcies: Purchasing Oil & Gas Assets

Navigating Procedures for Bankruptcy Acquisitions, Weighing Considerations Unique to Oil and Gas Assets, Mitigating Risks

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, October 3, 2017

Recorded event now available

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Program Materials

This CLE webinar will provide guidance to counsel in the energy industry on §363 sales in oil and gas bankruptcies and the bidding procedures and protections commonly adopted to guide the sale process. The panel will discuss the advantages and disadvantages of such transactions, as well as the interplay among the governing laws. The panel will offer best practices for developing a strategy for navigating the sale process competition and putting safeguards in place to minimize risk.

Description

The sharp drop in oil and gas prices and the slow climb back—prices continue to be below $50 per barrel—have left many oil and gas companies with diverse capital structures with financial pressure. Buying assets from financially distressed companies is inherently risky. In the oil and gas context, risks arise with environmental liabilities and executory contracts. There are some advantages to buying oil and gas assets from bankrupt sellers, including freedom from liens or other encumbrances.

Bankruptcies involving energy companies raise unique issues due to the interplay between the Bankruptcy Code, regulations governing the energy industry, and other federal and state laws.

Section 363 allows for a more expeditious and efficient sale process than confirmation of a Chapter 11 plan, although acquisitions through a Section 363 sale pose legal hurdles for both buyers and sellers.

Counsel for the buyer and seller must understand the risks and opportunities in bankruptcy sales and act strategically to negotiate a deal that maximizes the value of the troubled business to their clients’ respective benefits.

Listen as our authoritative panel of practitioners explores the unique challenges that can arise in a §363 sale of the assets in oil and gas bankruptcies. The panel will address the interplay between the Bankruptcy Code, federal and state laws, and the regulatory structure governing the energy industry. The panel will also discuss the risks distressed asset buyers must address and offer guidance on mitigating those risks.

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Outline

  1. Risks involving out-of-court acquisitions from distressed sellers
    1. Fraudulent transfer risks
    2. Hanging PSAs
  2. The bankruptcy process
    1. Timelines and key milestones
    2. Section 363 sales
    3. Free and clear sales
  3. Unique aspects of the §363 sales process
    1. Stalking Horse Process
    2. Section 363 purchase and sale agreements
    3. Executory contracts and cure costs
  4. Key takeaways and strategies

Benefits

The panel will review these and other key issues:

  • What unique challenges can arise in a §363 sale of the assets in oil and gas bankruptcies?
  • What risks do buyers and sellers face in §363 sales? How can parties minimize those risks?
  • What are best practices for counsel on both sides of the deal to tailor terms in distressed transactions?

Faculty

Epstein, Joseph
Joseph Epstein

Managing Member
Joseph G. Epstein

Mr. Epstein’s experience spans all areas of bankruptcy and business restructuring, Chapter 11 business...  |  Read More

Ferris, Matt
Matt Ferris

Partner
Haynes and Boone

Mr. Ferris practices in the firm’s Restructuring Group. He has more than 10 years of experience in the areas of...  |  Read More

Herman, Ira
Ira L. Herman

Partner
Blank Rome

Mr. Herman concentrates his practice on distressed public debt issues, insolvency matters involving upstream and...  |  Read More

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