A bitter courtroom fight over oil-and-gas reclamation bonds has ended, with a Texas federal judge dismissing the White Marlin $24M Bond Dispute after the parties reached a confidential settlement.
U.S. District Judge Lee H. Rosenthal signed the dismissal order Friday, stating the case was resolved “with prejudice” following a joint motion from U.S. Specialty Insurance Co., White Marlin Operating Co. LLC, and Formentera Partners Fund I LP.
Though the terms remain under wraps, filings confirmed that “all matters of controversy between the parties have been fully settled and compromised.”
A Web of Oil, Bankruptcy, and Bonds
The fight began in December 2022, when Tokio Marine unit U.S. Specialty Insurance sued White Marlin, accusing the company of dodging obligations under a 2015 indemnity agreement tied to oil and gas reclamation bonds.
The surety demanded $24 million in collateral, warning that White Marlin’s financial position risked leaving environmental cleanup projects unfunded. The insurer also sought nearly $1.1 million in premiums, attorney fees, and reimbursement for payments already made under one bond.
The case soon detoured into bankruptcy litigation, as White Marlin argued that responsibility for five of the bonds had shifted to Formentera when it acquired oil and gas properties through a related entity’s bankruptcy sale. The bankruptcy court disagreed, finding Formentera had not assumed liability.
