Exco Resources debtors ask court to toss breach-of-contract claims

By Caroline Salls

Pittsburgh, Oct. 23 – Exco Resources, Inc. and its Raider Marketing, LP unit asked the U.S. Bankruptcy Court for the Southern District of Texas to enter a summary judgment in connection with its objection to breach-of-contract claims filed by Enterprise Products Operating LLC and Acadian Gas Pipeline System, according to a motion filed Monday.

Exco said Enterprise and its affiliate Acadian filed claims for alleged breaches of gas sales and transportation contracts.

“These claims have no merit under the undisputed facts, the unambiguous contract terms and controlling legal precedent,” the Exco debtors said in the motion.

“Enterprise, in fact, was the one that breached the transaction documents, debtors were entitled to and properly terminated the contracts as a result of Enterprise’s breach, and debtors did not breach the contracts.”

Specifically, the debtors said Enterprise breached the sales contract when it did not pay for gas received from Exco in July 2016, resulting in termination of the contract.

Exco said it delivered about $6 million of natural gas to Enterprise in July 2016.

In addition, the debtors said they owed Acadian $2.25 million in fees under the transportation agreement for delivery of that gas.

“Although debtors did not pay Acadian the $2.25 million, the parties were entitled under the contracts to net out the amounts, meaning that when debtors did not pay the $2.25 million, Enterprise only needed to pay debtors $3.8 million,” the motion said. “Enterprise never paid.”

Exco said Acadian never provided a notice of default on the transportation agreement, as required by the agreement.

The debtors said they are asking the court to entirely disallow the Enterprise and Acadian claims.

A hearing is scheduled for Nov. 19.

Exco is a Dallas-based oil and gas exploration and production company operating in Texas, North Louisiana and Appalachia. The company filed for bankruptcy on Jan. 15 under Chapter 11 case number 18-30155.

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