Debtor Rockdale Marcellus Seeks to Avoid $22Million, Blames Agreements’ Terms For its Insufficient Capital
October 15, 2021, Western District of Pennsylvania – Rockdale Marcellus, LLC (“Rockdale”), a debtor and debtor in possession (together with Rockdale Marcellus Holdings, LLC, the “Debtors”), file a complaint against Defendants UGI Texas Creek, LLC, and UGI Energy Services, LLC seeking a judgment rejecting “burdensome gas gathering agreement and a gas marketing agreement” under section 365 of the Bankruptcy Code. Rockdale also seeks a declaration holding that the agreements do not contain any covenant that runs with the land under Pennsylvania law.
According to the complaint Rockdale paid approximately $22 million per annum to the Defendants under the agreements. Rockdale alleges that “because the obligations under the gas gathering agreement were avoidable”, the payments on account of such obligations are also avoidable. Further, the Debtors contend that the terms of the agreements left Rockdale with insufficient capital to operate through upturns and downturns of natural gas prices. Accordingly, Rockdale seeks to avoid the alleged amount as a constructively fraudulent transfer and recover it for the benefit of Rockdale’s estate.
By way of background, the Debtors constitute a privately held independent exploration and production company engaged in acquiring and developing natural gas. The case is In re Rockdale Marcellus Holdings, LLC and Rockdale Marcellus, LLC, Case No. 21-22080-GLT in the United States Bankruptcy Court for Western District of Pennsylvania