Cold Case: Bankruptcy Reopened More Than 80 Years Later

I read the link , the BK is secondary at best ,, the real problem is that ownership of the land was lost due to bad recordkeeping by the BK trustee resulting in wild deeds ,, oil and gas companies had to escrow millions for unknown owners of the land... the real owners needed to be located or the money would be forfeited to the state.

Worthless, cutover scrub in the 1920s, that no one knew was floating on natural gas, which would have been pretty much worthless itself. Add in that some old deeds can be iffy at best.

Now, if you want to see some screwed up real estate records, try the poor sections on New Orleans. Forced heirship (no longer the law) in the old days, plus unaffordable succession proceedings, and no one could sort out title on some of those properties after Katrina.

From the article:

“Although the bankruptcy code provides that closed cases can be reopened for cause and that no time restrictions are imposed by law, revival after eight decades appears unprecedented. According to Bloomberg Law: Bankruptcy Treatise, pt. I, ch. 42 (D. Michael Lynn et al. eds., 2016), the passage of time weighs heavily against reopening a case. The longer a party waits to reopen a closed case, the more compelling the reason to reopen must be. “

Early mineral severance in Dickenson County, VA in which the draftsman of a deed reserved coal, oil, etc., but not natural gas. Hence, the natural gas passed with the surface estate.

When coalbed methane gas began to be produced commercially in the mid-to-late 1980s in southwest Virginia, the caselaw was unclear on whether the coalbed methane gas would be owned by the coal owner (like in PA) or the surface owner. Many years later, the VA Supreme Court ruled that the owner of the coalbed methane was the natural gas owner.

A couple of large tracts where there were a number of cbm wells, for which royalties had been escrowed due to the ownership issue, was the basis for this dispute. On these tracts, Yellow Poplar Lumber Company, the debtor in the 1920s bankruptcy suit, never conveyed the two tracts. When the tracts were conveyed by the 1920s bankruptcy trustee, he failed to convey the coalbed methane, only the surface estate. Therefore, title to the methane remained behind in the stockholders of the bankrupt, and now long defunct company.

A very unusual set of facts that created a very tricky title scenario.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.