Carnero G&P v. SN EF Maverick
- Summarized by Jonathan Batiste , Rensselaer Polytechnic Institute
- 3 months 1 week ago
- Case Type:
- Business
- Case Status:
- Reversed and Remanded
- Citation:
- No. 24-20207 (5th Circuit, Nov 13,2025) Published
- Tag(s):
-
- Ruling:
- The bankruptcy court misconstrued its post-confirmation jurisdiction. Such jurisdiction exists only where disputes relate to a bankruptcy plan’s execution or implementation. The post-confirmation agreements between Debtor and prepetition counterparties did not constitute an executory contract or relate to the plan of reorganization. Appellant had no claims to raise until Debtor executed the post-confirmation agreements with the counterparties. Nothing barred Appellant from suing in state court over post-confirmation state law claims. The bankruptcy court and district court erred.
- Procedural context:
- Debtor filed for chapter 11 protection in 2019 and emerged from reorganization on April 30, 2020. Debtor assumed its pre-bankruptcy contract with Appellant. Debtor had unresolved contracts for taking natural gas and natural gas liquids to market. Debtor and its pre-petition counterparties restructured the contracts 18 months post-confirmation. Appellant sued Debtor in state court to challenge the restructuring of the contracts, asserting that the revised agreements conflict with its surviving, pre-bankruptcy contracts with Debtor. The lawsuit moved to the bankruptcy court, which ruled against Appellant. Appellant appealed to the district court, which affirmed the bankruptcy court’s ruling. Appellant then appealed to the circuit court.
- Facts:
- In 2017, Debtor and two other entities entered into an agreement whereby they would operate natural gas and natural gas liquid producing assets. In 2018, Appellant entered into an agreement with Debtor whereby Appellant would serve as a backup gatherer, processor, and purchaser of oil, gas, and natural gas liquids. Once Debtor entered bankruptcy, it agreed with Appellant to pursue formal rejection of other commitments before the plan of reorganization became effective. The counterparties to the other commitments commenced an adversary proceeding to object to the rejections, and the bankruptcy court issued orders disabling Debtor’s rejection efforts. Debtor then terminated the agreement with Appellant on June 24, 2021. Debtor and the counterparties then executed an agreement restructuring their pre-bankruptcy contracts. Debtor paid $50 million as part of a settlement agreement with the counterparties, and it received cost concessions in return. Appellant then filed a state court lawsuit against Debtor and the counterparties, asserting that the restructuring agreements interfered with Appellant’s rights under its agreement with Debtor. The lawsuit then went to the bankruptcy court, and the court confirmed its jurisdiction over the state law dispute.
- Judge(s):
- King, Jones, and Oldham
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