Oil & Gas Bankruptcies May Hit Snags Amid FERC Turf War
Publisher: Law360
July 9, 2020
Josh Cohen, co-chair of Day Pitney's Bankruptcy and Restructuring practice, was quoted in a Law360 article, "Oil & Gas Bankruptcies May Hit Snags Amid FERC Turf War." The article discusses the growing oil and gas bankruptcy wave set off by the market decline during the Covid-19 pandemic and the onslaught of more jurisdictional fighting between the bankruptcy courts and the Federal Energy Regulatory Commission (FERC). As oil and gas bankruptcies continue to increase, experts believe that jurisdictional battles will mostly likely multiply if bankrupt companies look to reject midstream contracts that are subject to FERC Federal Energy Regulatory Commission (FERC) oversight.
FERC recently expanded its conflict with bankruptcy courts after it found their findings showed that Chesapeake Energy Corp. is required to get FERC approval the blessing of their company before it can remove reject pipeline contracts in Chapter 11. A similar occurrence happened with PG&E that Chesapeake is mimicking. They are asking a bankruptcy court to nullify FERC's order and block the agency from taking action. This move made by FERC comes just months after the Sixth Circuit ruling, stating that bankruptcy courts will have the final ruling over whether power purchase agreements can be rejected.
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