As Waller's Samuel Henninger notes in this article published in the Norton Journal of Bankruptcy Law and Practice, the U.S. Bankruptcy Court for the District of Delaware identified “a developing split between bankruptcy courts regarding the enforceability of gas gathering agreements in whole or in part as real property covenants.”
Three bankruptcy courts found that certain agreements contained no real property covenants, while two bankruptcy courts found that certain agreements did contain real property covenants. All five courts examined whether the three following elements were present to create a real property covenant: touch and concern the land, privity of estate, and intent.
Ultimately, Samuel concludes that because some courts applied different standards on the touch-and-concern element, they arrived at different conclusions. It remains to be seen what the courts of appeals will decide regarding the developing split.
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