Bankruptcy Judge in Sabine Energy Upends ‘Running with the Land’ Covenants

U.S. Bankruptcy Judge Shelley Chapman in Manhattan ruled Tuesday that Houston-based Sabine Oil & Gas Corp. can reject contracts with two companies that gather, treat and transport oil and natural gas as part of their Chapter 11 restructuring.

The decision is a huge blow to midstream energy companies, as billions and billions of dollars in contracts they have with exploration and production corporations were previously viewed as untouchable in bankruptcy.