First Choice Energy

Wednesday, May 9, 2012

Another Lawsuit Filed Against Chesapeake

From Bloomberg Businessweek:

Chesapeake Energy Corp. (CHK) (CHK) shareholder accused the company of underreporting the use of company corporate jets by executives and directors for personal travel.
The shareholder, Gilberta Norris, filed a so-called derivative lawsuit yesterday in Oklahoma state court on behalf of the natural-gas supplier against its board, including Chairman and Chief Executive Officer Aubrey McClendon. Norris accuses the directors of breach of fiduciary duty by misleading shareholders about the true cost of personal use of company aircraft.
In the redacted, public copy of her complaint, Norris said she had asked to see Chesapeake’s books and records, which revealed “the true extent and the true cost of personal travel on the company’s aircraft.”
“Given that personal use comprised such a high proportion of total use, the board never had any basis for withholding from shareholders the large fixed costs of the aircraft,” Norris said. If the fixed costs had been included, “the true costs of personal use of the aircraft would have increased by close to an estimated $10 million a year,” she said.

Read the rest of the article here.

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