On May 16, 2026, the Texas Business Court located in Houston (Eleventh Division) issued its opinion in Plains Pipeline, L.P. and Plains Marketing, L.P. v. Arrowhead Gulf Coast Holdings, LLC, et al., offering potential guidance on the enforceability of survival periods, exclusive remedy clauses, and the limits of “assumed liabilities” language in asset purchase agreements.
Background and Key Facts
This case arose from a 2016 asset purchase in which Plains Pipeline, L.P. and Plains Marketing, L.P. (the sellers) sold pipeline assets to Arrowhead Gulf Coast Holdings, LLC and related Arrowhead entities (the buyers) pursuant to a BOA and Other Assets Purchase Agreement (the purchase agreement).
Following the sale, the sellers were sued in a Louisiana state court lawsuit involving claims for erosion damage and failure to maintain pipeline infrastructure. After incurring costs to defend and resolve those claims, the sellers sought reimbursement from the buyers, contending that the buyers had assumed the relevant liabilities under the purchase agreement.
The parties filed cross-motions for traditional summary judgment, each framing the dispute on their own terms. The sellers characterized it as a “straightforward breach of a negotiated asset-purchase agreement,” arguing the buyers agreed to the “Assumed Liabilities” provision, which required them to assume all post-closing liabilities in perpetuity. The buyers characterized it as a “contractual indemnity case,” arguing the indemnification obligations had a defined survival period that had already expired before the sellers asserted their claims.
The Court’s Analysis
The Texas Business Court focused its analysis on the unambiguous language of the purchase agreement and found for the buyers on every issue.
First, the court found that the purchase agreement unambiguously limits the sellers’ remedy to the indemnification provisions set forth in Article X of the agreement. Section 10.4 indemnification obligations were expressly subject to a survival period, and critically, sellers failed to provide the required written claim notice before that survival period expired.
Second, the court rejected the sellers’ central argument that the absence of temporal limiting language in the assumption of liabilities provisions meant Arrowhead’s obligations ran indefinitely. The court found this reading untenable for three reasons: it would render the exclusive remedy provision superfluous; it would effectively read the indemnification provisions out of the agreement altogether; and it would violate the foundational Texas rule that contracts must be interpreted to harmonize and give effect to every provision.
Finally, the court declined the sellers’ invitation to find ambiguity. Under Texas law, a contract is only ambiguous if it is susceptible to two or more reasonable interpretations. Because Plains’ “perpetuity” reading directly conflicted with the agreement’s express survival-period provision, the court determined it was not a reasonable alternative interpretation.
The Ruling
The Texas Business Court granted the buyers’ motion for summary judgment on all claims and denied the sellers’ cross-motion. The entire dispute was resolved as a matter of law on contract interpretation.
Practical Takeaways for Businesses
This decision underscores two important considerations for businesses involved in asset acquisitions and divestitures:
1. Survival Periods Matter. Indemnification claims are only viable if asserted within the contractually agreed survival window. Parties should consider diligently tracking these deadlines from the moment a deal closes and sending timely written notice of any potential claims — even ones that seem uncertain or preliminary. Missing the deadline, as shown in this case, may be fatal to an otherwise legitimate claim.
2. Exclusive Remedy Clauses Will Be Enforced. Texas courts may hold parties to their bargain. If an agreement channels post-closing disputes into a specific indemnification framework, a party may be unable to escape that framework simply by relabeling its claim. Businesses should consider drafting these provisions carefully and working to understand their full implications before signing.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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