Chapter 7 & Chapter 11 Oil and Gas Remnant Sales

Key record questions

1. What a remnant asset sale conveys

   Near the close of a Chapter 7 liquidation or a post-confirmation Chapter 11 liquidating trust, the trustee or plan administrator often sells a catch-all package of known and unknown remaining assets, or executes a quitclaim assignment covering a list of counties and wells. That instrument conveys only whatever right, title, and interest the bankruptcy estate still held on the sale date.

   Record source

   Bankruptcy docket & county clerk

   Output

   Graded finding in the trace report

2. Why bankruptcy schedules and county clerk records diverge

   Debtors frequently list operator payor numbers, old division order lines, or prospect names on Schedule A/B without a legal description, or fail to schedule small royalty and overriding royalty interests entirely. Conversely, an interest listed on a schedule may have been conveyed away or terminated when the underlying lease expired years before the petition date.

   Record source

   Bankruptcy docket & county clerk

   Output

   Graded finding in the trace report

3. Reconciling the docket to the county conveyance chain

   A trace starts at the bankruptcy docket (petition date, schedules, Section 363 sale orders, confirmed plan, and trustee deed) and moves into each county clerk index to verify the vesting instrument into the debtor, any pre-petition conveyances out, and whether the trustee's conveyance was recorded in the county real property records.

   Record source

   Bankruptcy docket & county clerk

   Output

   Graded finding in the trace report