Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is a small business bankruptcy ?”
A forty-six-year-old bankruptcy case illustrates the pitfalls that ensnare even careful craftsmen. Ambiguities on deeds and sales documents connected to the sale of a debtor’s assets in 1969 meant that buyers who thought they owned oil and gas drilling rights… well, didn’t.
The properties at issue in the case were “undeveloped severed oil and gas leases.” These kinds of property interests “are not considered to be in the possession of anyone until they are developed,” according to bankruptcy attorney Vicki R. Harding of Pepper Hamilton LLP.
When one of the successors-in-interest to the purchasers in the 1969 bankruptcy sought to develop the interests, it conducted a title search of its ownership interest and discovered defects in the conveyance documents prepared by a bankruptcy trustee in 1969. The successor-in-interest to the purchaser asked the bankruptcy court to reopen the old bankruptcy case in order to clarify ambiguities in the sales documents.
In one instance, “the conveyance of a lease interest included two different legal descriptions,” while in another, “the denominator used to identify one of the fractional interests was calculated in a manner inconsistent with the way it was calculated for other properties.”