As a reaction to the dramatic oil price volatility, many energy companies plan to streamline operations by reducing work force and shedding assets. Those who do so face tightening credit and decline in asset value that may impact the solvency of the business enterprise. Energy companies must maintain operations where possible to preserve value and position themselves for a turnaround in prices. Those without staying power because of a lack of capital may be forced to position themselves for sale of all or substantially all of their assets at the highest value. Buyers will want to acquire assets expeditiously and free of liability. Under these circumstances, various parties doing business in the energy industry must be aware of their duties and risks of liability. These parties must also be up-to-date on the means by which to expeditiously transfer assets free of certain claims and interests to maximize recovery. This Client Alert will briefly highlight only a few points to be aware of.
