Post-Confirmation Jurisdiction Ends at the Plan’s Edge: Fifth Circuit Limits “Related-To” Jurisdiction and Rejects Plan-Based Recasting of Post-Confirmation Deals as Executory Contracts

Introduction

In Carnero G&P, L.L.C. v. SN EF Maverick, L.L.C., et al., the United States Court of Appeals for the Fifth Circuit reversed the bankruptcy and district courts and directed remand to Texas state court. The panel (Judge Edith Jones writing) held that the bankruptcy court lacked post-confirmation “related-to” jurisdiction under 28 U.S.C. § 1334(b) to adjudicate state-law contract and tort claims among non-debtors concerning a suite of integrated, post-confirmation midstream agreements. Central to the holding are two determinations:

Post-confirmation jurisdiction exists only for disputes that pertain to a plan’s implementation or execution; and
The integrated Master Settlement Agreement (MSA) and Midstream Restructuring Agreement were not “Executory Contracts” under the confirmed plan’s terms and the Bankruptcy Code, and therefore could not be leveraged to manufacture bankruptcy jurisdiction.

The case arose from Sanchez Energy’s Chapter 11 (reorganized as Mesquite Energy), and competing midstream arrangements for gathering, processing, transporting, and marketing hydrocarbons from the Comanche Field. After the plan’s April 30, 2020 confirmation and consummation, Mesquite and other parties settled a separate “Oxy Adversary” and executed a comprehensive, integrated set of midstream agreements, which Carnero alleges conflicted with and impaired its prepetition Carnero Agreement. Carnero sued in state court; the case was removed to bankruptcy court, which dismissed on the pleadings, asserting jurisdiction. The Fifth Circuit disagreed and sent the dispute back to state court.

Summary of the Opinion

The Fifth Circuit held that the bankruptcy court lacked subject-matter jurisdiction to decide Carnero’s state-law claims because:

Under Craig’s Stores and GenOn, post-confirmation “related-to” jurisdiction extends only to matters that pertain to the plan’s implementation or execution; few non-debtor disputes qualify.
The MSA and Midstream Restructuring Agreement did not qualify as “Executory Contracts” under the plan or § 365. They were executed 18 months after confirmation, were integrated “wholesale revisions,” in part involved non-debtors, and were not assumed cum onere.
The plan’s unusual provisions (retroactive effective date; broad assumption/rejection flexibility; ability to settle without court approval or Rule 9019 notice) could not transform these post-confirmation agreements into plan-governed executory contracts.
Carnero was not barred by the plan or litigation strategy. It had no basis or obligation to object at confirmation to its own assumption or others’ rejections; it was not required to object to the late 2021 Oxy settlement in bankruptcy court, which was not presented for Rule 9019 approval and was dismissed under Fed. R. Civ. P. 41.

Because neither the plan nor § 365 encompassed the later integrated transactions, the controversy did not pertain to plan implementation or execution. The court reversed and remanded with instructions to remand to state court and did not reach the merits.

Analysis

Precedents Cited and Their Influence

Craig’s Stores of Texas, Inc. v. Bank of Louisiana, 266 F.3d 388 (5th Cir. 2001): The seminal Fifth Circuit authority establishing that, post-confirmation, bankruptcy jurisdiction “terminates” except for matters pertaining to implementation or execution of the plan. The panel relies on Craig’s Stores to anchor the narrow post-confirmation jurisdictional standard.
GenOn Mid-Atlantic (Natixis Funding Corp. v. GenOn Mid-Atl., L.L.C.), 42 F.4th 523 (5th Cir. 2022): Recognized as living “at the limit” of post-confirmation jurisdiction. Jurisdiction existed there because the settlement was expressly contemplated by, and “enshrined” in, the plan and not yet final. The court distinguishes GenOn on all three points, emphasizing that none applies here.
U.S. Brass (In re U.S. Brass Corp.), 301 F.3d 296 (5th Cir. 2002): The “implementation or execution” test for post-confirmation jurisdiction is reaffirmed and applied.
KSRP (In re KSRP, Ltd.), 809 F.3d 263 (5th Cir. 2015): Pre-confirmation “conceivable effect” test for “related-to” jurisdiction. The panel notes this broader standard narrows after confirmation.
Seven Seas Petroleum, 522 F.3d 575 (5th Cir. 2008); Chesapeake Energy, 70 F.4th 273 (5th Cir. 2023); and Galaz, 665 F. App’x 372 (5th Cir. 2016): Post-confirmation disputes between non-debtors or with attenuated nexus to the plan fall outside bankruptcy jurisdiction—supporting the outcome here.
Mission Products Holdings, Inc. v. Tempnology, LLC, 587 U.S. 370 (2019), and NLRB v. Bildisco & Bildisco, 465 U.S. 513 (1984): Define executory contracts as those with performance remaining on both sides, and that assumption is cum onere. These principles underpin the court’s conclusion that the integrated, post-confirmation deals are not § 365 executory contracts.
Falcon V, 44 F.4th 348 (5th Cir. 2022): An executory contract inquiry looks to material obligations as of the petition date; reinforces the temporal dimension missing from Mesquite’s position.
Richmond Leasing Co. v. Capital Bank, N.A., 762 F.2d 1303 (5th Cir. 1985) (per curiam): Assumption can include amendments, but wholesale revision of parties’ relations falls outside § 365—a key analytical step in finding the MSA/Restructuring beyond “assumption as amended.”
Espinosa, 559 U.S. 260 (2010): A party must challenge illegal plan provisions before confirmation or be bound. The Fifth Circuit stresses Carnero is not doing that; it challenges post-confirmation conduct that did not exist at confirmation.
Purdue Pharma (Harrington v. Purdue Pharma L.P.), 603 U.S. 204 (2024): The opinion flags the caution against using plan mechanisms to bar claims against non-debtors—resonating with the court’s unwillingness to read the plan to foreclose state-law claims against non-debtors here.

Legal Reasoning

1) The narrow post-confirmation jurisdictional lens

The court begins where Fifth Circuit law requires: post-confirmation, jurisdiction “does not last forever” and survives “only where the dispute pertains to the plan’s implementation or execution.” This is a more exacting standard than the pre-confirmation “conceivable effect” test. Because all parties here are non-debtors and the claims are purely state law, the court scrutinizes whether the plan’s text or the confirmation process genuinely tethered the later dispute to implementation or execution of the plan.

The bankruptcy court relied on a broad reading of GenOn—suggesting jurisdiction exists if a lawsuit threatens a settlement “crucial to” reorganization. The Fifth Circuit rejects that premise outright, noting GenOn’s own caution: few non-debtor disputes qualify, and jurisdiction exists only for issues tied to execution of a plan-settled arrangement. None of GenOn’s limiting features (plan contemplation, enshrinement, nonfinality at time of dispute) exists here.

2) Why the MSA and Midstream Restructuring were not “Executory Contracts” under the plan

The court undertakes a close textual and doctrinal analysis:

The plan defines “Executory Contract” by reference to § 365/§ 1123, which import the Code’s established definition (performance due on both sides as of the petition date) and the cum onere principle.
The MSA and Midstream Restructuring arose 18 months post-confirmation, were fully integrated, and effected a wholesale revision of prepetition relationships. Some agreements involved only non-debtors; some did not exist prepetition; some were “assumed as revised” and contingent on multiple interlocking pieces—contrary to cum onere.
The plan’s Article V.F clause—capturing “modifications, amendments, supplements, restatements, or other agreements that in any manner affect” an executory contract—cannot be read to swallow everything post-confirmation. The court deploys two limits:
- Temporal: the clause expressly covers modifications “executed by the Debtors during the Chapter 11 Cases.” That did not happen here.
- Contextual (noscitur a sociis): “other agreements” are of a piece with modifications/amendments/supplements/restatements—i.e., subsidiary adjustments within a principal contract—not a field-wide, cross-party, post-confirmation restructuring involving non-debtors.
Even where some prepetition contracts were “assumed as revised,” the “as revised” element was inseparable from the broader integrated settlement. Under Richmond Leasing, that kind of wholesale revision cannot be shoehorned into § 365 assumption.

Bottom line: the MSA/Restructuring agreements were not executory contracts under the plan; they were new, post-confirmation business deals. Without a true executory-contract hook, the plan provides no jurisdictional anchor.

3) Plan-based and litigation-strategy “bars” do not apply

The bankruptcy court reasoned Carnero forfeited its objections by not objecting at confirmation or to the December 2021 settlement. The Fifth Circuit rejects both theories:

No duty to object at confirmation. Carnero’s own contract was set for assumption; it had no reason to object. It also had no reason to object to proposed rejections that favored it. Critically, Carnero’s state-law claims did not even exist until the later, integrated deals were executed.
Retroactivity cannot “whitewash” conflicts. The plan’s retroactive attribution of assumptions to the Effective Date does not resolve actual conflicts among contracts or displace state-law remedies when post-confirmation conduct causes harm.
No duty—indeed no mechanism—to object to the Oxy settlement. The MSA/Restructuring was not presented for Rule 9019 approval; counsel explicitly told the bankruptcy court they were not seeking approval and did not need to provide notice under the plan. The court’s role at the December 21, 2021 hearing was ministerial: a stipulated dismissal under Fed. R. Civ. P. 41, expressly limited to the Oxy parties, with an acknowledgment of not affecting non-parties like Carnero.

Because the plan did not require Carnero to object and the settlement was not judicially approved in a way that binds non-parties, there is no bar to Carnero’s state-law claims, and no “plan enforcement” issue to confer jurisdiction.

Impact

The decision tightens already narrow post-confirmation bankruptcy jurisdiction in the Fifth Circuit and delivers several practical messages:

Plan drafting cannot manufacture jurisdiction post-confirmation. Even “unorthodox” plan provisions allowing retroactive assumption/rejection or no-approval settlements will not convert later, integrated commercial restructurings into plan-governed executory contracts.
If parties want bankruptcy-court jurisdiction later, enshrine it up front. As in GenOn, jurisdiction is most defensible where the plan expressly contemplates and incorporates a settlement, the court actually approves it, and the dispute arises in implementing that plan-approved arrangement.
Integrated, post-confirmation deals among non-debtors belong in state court absent a plan nexus. Energy reorganizations often rely on sweeping, post-confirmation midstream restructurings. This decision confirms those state-law disputes will ordinarily be resolved outside bankruptcy court.
Confidentiality and opacity won’t shield transactions from state-law scrutiny. Keeping integrated agreements confidential in bankruptcy court (and avoiding Rule 9019) simultaneously undermines arguments for bankruptcy jurisdiction and preclusion later.
Executory-contract limits matter. Wholesale revisions, interdependent “all-or-nothing” settlements, and agreements executed post-petition/post-confirmation—especially with non-debtors—do not fit § 365.

For practitioners, the case is a roadmap: use Rule 9019, notice, and actual approval if you want plan-centered jurisdiction and preclusion. Otherwise, expect to litigate purely state-law, non-debtor disputes in state court after confirmation.

Complex Concepts Simplified

Post-confirmation “related-to” jurisdiction. Before confirmation, bankruptcy courts can hear matters that might affect the estate. After confirmation, that power shrinks: courts generally can only hear disputes that directly involve carrying out the plan. Most fights between non-debtors do not qualify.
Executory contract. A contract where both sides still have important performance left as of the bankruptcy filing. Debtors can assume (keep) or reject (breach) such contracts, but assumption must take the contract as-is (cum onere).
Assumption “cum onere.” If you assume a contract, you accept its benefits and burdens—no cherry-picking or one-sided rewrites through assumption alone.
Rule 9019 vs. Rule 41. Rule 9019 requires notice and court approval of bankruptcy settlements, which can lead to binding, plan-anchored orders. Rule 41 allows parties to stipulate to dismiss a case without the court substantively approving the settlement—less (or no) preclusive effect on non-parties and less basis for bankruptcy jurisdiction later.
Noscitur a sociis. A canon of interpretation meaning “it is known by its associates.” When a general phrase follows specific terms, the general phrase is limited by the specifics. Here, “other agreements that in any manner affect” is limited by the preceding list of intra-contractual changes, not world-spanning restructurings.
GenOn’s “limit” caveat. GenOn’s jurisdictional holding is very narrow and depended on the plan itself embedding the settlement; it does not authorize jurisdiction merely because a later settlement is important to the reorganized business.

Conclusion

Carnero G&P v. SN EF Maverick reaffirms and sharpens the Fifth Circuit’s narrow view of post-confirmation bankruptcy jurisdiction. The court holds that:

Post-confirmation jurisdiction exists only for matters pertaining to plan execution or implementation;
Integrated, post-confirmation midstream settlements are not executory contracts under the plan or § 365, especially where they involve non-debtors, did not exist prepetition, and represent wholesale revisions rather than cum onere assumptions; and
Plan language and procedural choices (retroactivity, no approval/no notice settlements) cannot be used after the fact to pull state-law, non-debtor disputes back into bankruptcy court.

The decision is a cautionary tale for plan drafters and reorganized debtors: if later disputes are to remain within the bankruptcy court’s ambit, the plan must genuinely and expressly integrate the settlement or contract at issue, and the court must actually approve it with appropriate process. Otherwise, state courts will be the proper forum, as here, where the Fifth Circuit ordered remand for adjudication of the merits under state law.