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Covenants Running With The Land., Michael P. Pearson

St. Mary's Law Journal

The analysis of real covenants in wellhead contracts (e.g., gas purchasing, gathering, processing, etc.) by Texas courts has not been consistent. As a result, some bankruptcy courts are holding that a debtor in bankruptcy is not liable for a prior contractual obligation, unless the covenant is held to be a real covenant running with the land. For instance, the holding in In re Sabine Oil & Gas Corp. (Sabine I) contradicts the holdings in Westland Oil Development Corp. v. Gulf Oil Corp. and in Inwood North Homeowners' Association, Inc. v. Harris. The Sabine I court held that because the Acreage …