Case Studies

Shale Boom Brings Challenges to the Banking Industry

Residential mortgage lenders used to pay little attention to oil and gas leases. Then came the drilling boom in the Marcellus and Utica shales and a spate of negative publicity about the potential adverse effects of fracking. Our firm has been engaged in an ongoing project to review oil and gas leases in connection with loans secured by mortgages on residential properties. We advise our lender client regarding whether the lease contains sufficient protections for the borrower and the bank that the loan can or should be made. We also review requests from oil company lessees that the bank’s existing mortgage be subordinated to their leases.

Article 9 Asset Acquisition of Craft Company

Kegler Brown represented a private equity firm in its sponsored Article 9 asset acquisition of two distressed businesses in the gift and stationery, children’s craft and paper crafts industries.

Representation of Community Bank Using Personal Property as Collateral

Not every borrower has real estate to put up as collateral for a loan, but many have personal property that will provide adequate security to a lender. Personal property comprises just about everything other than real property, including goods, inventory, equipment, accounts, documents and instruments. Stock is also personal property, as are interests in partnerships and limited liability companies. Our firm provides ongoing assistance to a local community banking client in documenting secured transactions, including both the promissory note and the relevant security documents, and in perfecting the security interests to establish the bank’s priority vis-à-vis other creditors of the borrower. And we help levy on the collateral if the loan goes bad.

Oil + Gas Leasehold Interest Litigation

Our attorneys regularly represent oil and gas producers defending claims by landowners seeking to cancel oil and gas leases for alleged breaches of implied covenant to develop, lack of production under secondary term and other claims.

Oil + Gas Foreclosure Litigation and Resolution

Our firm recently resolved multi-million-dollar foreclosure litigation relating to real estate and mineral interests. These negotiations involved the resolution of an amount claimed due for an oil and gas development loan and a lien on oil and gas interests. The successful resolution included the creation of a new oil and gas lease, securitization documents and a work-out agreement.

Workout and Friendly Foreclosure of Failing Pipeline Company’s Assets

In this case, the pipeline company failed during completion of a major project for a mid-stream transporter during the rainy winter season; the mid-stream transporter alleged faulty construction and the pipeline company defaulted on its loan. Attorneys at Kegler Brown negotiated a loan workout between the lender, the mid-stream transporter and the pipeline construction company, as well as other creditors, to complete construction, release liens, sell assets and pay debts.

$6 Million Credit Facility Default Workout

We successfully guided an out-of-court workout of a borrower’s default on a $6 million credit facility secured by real estate and heavy construction equipment. Our attorneys assisted in the asset liquidation and resolved priority disputes with other secured creditors. We also negotiated an asset surrender agreement and secured party sale of collateral.