On page 2B of Dallas Morning News, Friday, October 1, 2010.  Tarrant County woman files class-action lawsuit against subsidiaries of Chesapeake saying they shortchanged royalty owners in the Barnett Shale.  Lawsuit filed in U.S. District Court in Oklahoma City.

 

Lawsuit says Chesapeake should base royalties on the full market value of nat gas instead of 'fictitious' price it gets from a Chesapeake entity.

 

This is one to case to look at for you HS royalty owners who feel shortchanged!

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Sorry for going off topic, but thanks for your feedback.
While in some sense, this is a good thing, don't get too happy. Class action lawsuits are often a way that the lawyers and the defendants scam the "plaintiffs."

The way it works is this:

1) A law firm files a class action suit on "behalf" of a group of plaintiffs.
2) The "members" ("plaintiffs") of the class are notified and given a chance to opt-out of the class. If you don't opt out, you are bound by the terms of the legal action.
3) Legal wrangling takes place.
4) A settlement is reached or a trial is held.
5) Payments or whatever remedies are agreed on are then paid out. The matter is settled.

The problem with this is that the following scenario is entirely too common.

The plaintiffs have a legitimate claim for $100 million total.
The plaintiff's lawyers and the defendant KNOW that the claim is worth $100 million or so.
The defendant offers quickly to settle with the defendant for $20 million.
The law firm gets its $6 million (or more) percentage of the claim.
The law firm makes a quick buck, and doesn't have to do much work or spend much money, and gets paid now rather than several years in the future.
The members of the class lose their right to sue on this issue.

Sometimes the "payment" is fraudulent anyway. For example, the truck with a serious safety defect. The settlement was a coupon for $1000 off your next purchase of an XYZ motors truck. Or the cable TV company where the "payment" was one free month of an additional service when you sign up for new service. Of course, the lawyers were paid in cash.

In theory, the judge is not supposed to allow a settlement not in the best interests of the plaintiffs. In practice the judge will sign off on some very bad settlements that screw the plaintiffs out of their legitimate claims, let the defendants off the hook, and give handsome cash sums to the lawyers filing the case.

That doesn't mean that this particular case will work out this way, but it's a very legitimate concern.
Mark,
Could you post a link to the article or the actual text?
Thanks
Thank you sir.
Robert
I hope CHK gets reamed no this deal. I do not like their business practices when it comes to selling gas. They are a very competent operator but but unscrupulous when dealing with royalty owners.
When I get my division orders I will be contacting you guys!
You are so right! I contacted Chk and they checked our lease and guess what? they were taking out transp. & other charges in error! Never was us being a participant in production or other even a part of our lease. They are the professionals that are supposed to KNOW what a lease says, etc. They also made a mistake on the initial percentage and went back and recovered $$ from us. They also claimed to have sold gas for less than they paid us 9 months ago and took back some $$ in a recent check! Some kind of business practices they have! Now, we feel like we need to pay somebody to oversee our paperwork and info from them monthly! We do NOT want to get involved with a class action as only the lawyers win. SAM
Yes I know the felling about these 2 dollar royality checks, I know that the two unit wells that are on our property in de soto parish are producing because I have spoken to and look at the office of conservation test well production, this is getting very depression. I feel as though we are being cheated. That entire parish is producing, WHAT SHALL WE DO TO PUT A STOP TO THIS THANKS KP
KMP,
One thing you can do is contribute your pricing data to my survey. Please read the discussion "What Price Are You Getting For Gas?" I am compiling data to see if there are differences among regions, operators, etc. I need all the data I can get. Please read the discussion, and send my your pricing data. Thanks, in advance.
Roy,
I need a bit more info. Are you saying you have 4 wells? Can you tell me what field each well is in?

Is this the price you received for July?

Who did you lease to? Who is your operator?

Do you have cost-free royalties?

Thanks.
Roy,
I like to track each well individually. I sent you a friend request. Would you accept it, and please email back to me the section/township/range of each well, and let me know which price goes for which well. Also, please send prices for each month, beginning with March 2010, if you have the data.

Many users have had good luck contacting Chesapeake, but it requires patience and persistence. Katie Mc has recommended that you call them at 1-877-CHK-1GAS. You likely won't get a person, but they do call you back, if you leave a message. Remember, these people on the phone bank in Oklahoma are way overburdened, so politeness goes a long way.

Yes, your $2.19 sounds very low, and merits an explanation. Good luck. Several people have already gotten corrections made as a result of our survey on GHS.com. I hope you do too.

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