Overview
The McGinnis Lochridge Difference
National restructuring firms bring bankruptcy expertise but can stumble on the oil and gas issues that drive value and risk in energy cases. Regional energy firms understand the assets but lack bankruptcy court experience. We bridge that gap—fielding teams that combine sophisticated bankruptcy litigation capability with the deep oil and gas knowledge that only comes from decades of industry focus.
Most bankruptcy lawyers learn oil and gas issues on the fly. Most oil and gas lawyers avoid bankruptcy court. We do both—and have for years. When energy assets are in play, the stakes are too high for lawyers who are learning on your dime.
This dual capability matters because oil and gas bankruptcies don't follow the standard restructuring playbook. Mineral leases have habendum clauses that can terminate assets mid-case. JOA obligations create administrative expense exposure that affects plan feasibility. Plugging liabilities can dwarf the value of producing assets. Regulatory requirements limit what a debtor can reject and what a buyer can avoid.
When Energy Assets Hit the Auction Block, We're Already at the Table
Bankruptcy proceedings involving oil and gas companies present unique challenges that generalist restructuring lawyers simply don’t always understand. The oil and gas industry presents unique issues, such as:
- plugging and abandonment liabilities
- Successor liability traps hidden in lease assignments
- Joint operating agreement obligations that follow assets through sale
- Regulatory compliance that can't be discharged
At McGinnis Lochridge, we bring decades of oil and gas litigation and transactional experience into bankruptcy court—giving our clients a decisive advantage whether they’re acquiring distressed assets, defending against adversary claims, or financing a debtor’s operations as a DIP lender. We've helped clients navigate these complexities on both sides of the "v."—prosecuting and defending claims, acquiring and divesting assets, lending to and litigating against distressed operators. This experience gives us pattern recognition that specialists in only one discipline can't match.
Adversary Proceedings with Energy Industry Command
Bankruptcy adversary proceedings involving oil and gas assets require trial lawyers who understand both the Bankruptcy Code and the technical realities of upstream operations. Our attorneys have battled preference actions, fraudulent transfer claims, lease rejection disputes, and contract assumption battles in bankruptcy courts across Texas. We know how to attack—and defend—avoidance actions involving insider transactions, and we understand the operational context that makes certain transfers legitimate business decisions rather than fraudulent conveyances.
When disputes arise over whether leases terminated pre-petition, whether JOA obligations ride through a sale, or whether environmental liabilities can be shed in bankruptcy, we bring the same technical mastery to bankruptcy court that we bring to state and federal trial courts. Opposing counsel and their restructuring specialists rarely match our depth in the underlying oil and gas issues that drive these disputes.
Strategic Bidders and Stalking Horse Representation
Acquiring assets out of bankruptcy can deliver exceptional value—or catastrophic exposure. The difference often comes down to how well your lawyers understand the risks buried in oil and gas properties.
We represent strategic bidders and stalking horse bidders through every phase of the Section 363 sale process. Our work includes:
- Structuring asset purchase agreements that properly allocate plugging and abandonment liabilities
- Negotiating bid protections, break-up fees, and expense reimbursement provisions
- Conducting due diligence focused on successor liability, title defects, and regulatory compliance
- Analyzing whether to acquire—or avoid—the debtor's litigation claims and avoidance actions
- Navigating competitive auction dynamics when our clients face overbids
- Coordinating with regulatory counsel on Railroad Commission requirements that survive bankruptcy
We’ve positioned clients as stalking horse bidders in complex oil and gas bankruptcies and successfully represented backup bidders through competitive auctions. Whether the goal is to acquire a distressed competitor's premier acreage or to pick up non-core assets at an auction, we structure transactions that capture value while managing the risks unique to energy acquisitions.
DIP Lender Representation
Debtor-in-possession financing in oil and gas cases requires lenders who understand both bankruptcy dynamics and the operational realities of keeping wells flowing. We represent DIP lenders in structuring facilities, negotiating adequate protection, and enforcing their rights when debtors fail to perform.
Our experience with oil and gas operations allows us to evaluate collateral with precision, identify operational risks that affect recovery, and structure covenants that protect lender interests without strangling the debtor's ability to maintain production. When disputes arise over cash collateral, adequate protection, or the scope of the DIP lender's superpriority claims, we litigate those issues with the same intensity we bring to any high-stakes trial.
Protecting Your Interests When Counterparties File
When your JOA partner, your lessee, your royalty payor, or your contract counterparty files for bankruptcy, you need counsel who can move fast and protect your position. We help clients file proofs of claim, seek relief from the automatic stay, challenge assumption and assignment of executory contracts, and assert administrative expense priority for post-petition obligations.
We also help operators and working interest owners understand their rights when a co-owner's bankruptcy threatens joint operations. From demanding adequate assurance of future performance to seeking appointment of a receiver for abandoned wells, we know the tools available to protect our clients' operational and financial interests.
