Swiss Re v. Fieldwood Energy
- Summarized by Caleb Chaplain , U.S. Bankruptcy Court, Western District of Virginia
- 2 years 6 days ago
- Case Type:
- Business
- Case Status:
- Affirmed
- Citation:
- 23-20104 (5th Circuit, Feb 20,2024) Published
- Tag(s):
-
- Ruling:
- The Fifth Circuit ruled that the district court correctly held that the appeal was statutorily moot under section 363(m) (and that the Supreme Court’s ruling in MOAC Mall Holdings LLC v. Transform Holdco LLC, 598 U.S. 288 (2023), had not changed “the landscape around statutory mootness”).
- Procedural context:
- In confirming the debtors’ chapter 11 plans, the bankruptcy court determined that the sale and allocation of the debtor’s assets, pursuant to section 363(f), would be free and clear of the subrogation rights of companies that had issued surety bonds to the debtor. The sureties appealed, and the district court held that the challenges were both statutorily moot under section 363(m) and equitably moot under Fifth Circuit case law. The sureties again appealed.
- Facts:
- Fieldwood Energy LLC and its affiliates, among the largest oil and gas exploration and production companies operating in the Gulf of Mexico, filed chapter 11 petitions. As oil and gas companies operating on the Outer Continental Shelf, the debtors had decommissioning obligations (i.e., once relevant facilities were no longer being used, the debtors would need to plug wells, decommission pipelines, remove platforms, and clear the seafloor of obstructions created by the company’s operations).
As part of their reorganization plans, the debtors sought to fund the decommissioning obligations by (i) selling their oil and gas assets and equity interests, (ii) effectuating divisive mergers with the allocation of some of the oil and gas assets among the resulting entities, and (iii) abandoning other assets. The bankruptcy court confirmed the plan providing that the sales and reallocation of assets would be free and clear of liens, claims, encumbrances and other interests, including the sureties’ rights of subrogation against the debtors.
- Judge(s):
- Southwick, Engelhardt, and Wilson
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