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Wednesday, December 9, 2015

Settlement in PA Chesapeake Energy Underpaid Royalties Lawsuit Now Over $17 Million

From NGI:
A long-delayed class action settlement between Pennsylvania landowners and Chesapeake Energy Corp. to resolve claims that the company improperly deducted post-production fees from royalties has received preliminary approval from a federal judge, ballooning to more than $17 million and now involving thousands of property owners. 
Originally reached in August 2013, the $7.5 million settlement between Chesapeake and a little more than a dozen landowners now includes in excess of 15,000 people, who are expected to receive portions of an estimated $17 million. Attorney Michelle O'Brien of the O'Brien Law Group, who represents the lead plaintiff, Demchak Partners LLP, and who has been negotiating the settlement for years now, said the estimate could grow. It's unclear, she said, how many landowners could ultimately be included in the class. 
"The settlement is based on the actual deduction taken out of each individual class member's royalty check," she said. "Every single day that amount increases and now it will increase further until Feb. 2 if the settlement is approved. We don't know the final number yet, so that was a rough estimate from several months ago." 
A federal judge in October gave preliminary approval for the settlement, which had long been delayed as other parties filed similar complaints against Chesapeake and vied to represent a broader class (seeShale Daily, Sept. 11, 2014). Notices of the proposed settlement, which apply to any Pennsylvania Chesapeake lessor with a lease containing a market enhancement clause, were sent out Nov. 2. An approval hearing has been set for Feb. 2, 2016 in the U.S. District Court for the Middle District of Pennsylvania.
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