Lawsuit Against Chesapeake Say McClendon Was Given Unjust Preference Over Stockholders
Chesapeake Energy Corp. (CHK) let Aubrey McClendon, its chief executive officer, profit from lucrative Texas oil and gas wells while denying the same chance to leaseholders on the properties, according to a lawsuit.
Chesapeake lost one-fifth of its market value this year as the impact of tumbling gas prices was compounded by disclosure that McClendon borrowed more than $800 million last year to finance his stakes in thousands of company-owned oil and gas wells. McClendon was stripped of his chairman’s role in June and is under investigation by the board for his borrowings.
According to a complaint filed yesterday in federal court in Houston, McClendon was allowed to purchase a 1 percent to 2 percent interest in wells drilled by Chesapeake, using his stake in the wells as collateral. The company was contractually obligated to offer the leaseholders a similar chance to profit in wells it developed across a 10,900-acre swath described as the “sweet spot” of the Barnett Shale, an oil and gas formation under Fort Worth, Texas, according to the plaintiffs, two Houston energy companies.