Chesapeake Royalty Owners Lawyer Up
http://www.cleburnetimesreview.com/local/x864252441/Chesapeake-roya...
An estimated 180 people turned out on Tuesday evening to hear a Fort Worth attorney tell them how to win back royalties he said Chesapeake Energy Corp. has improperly withheld.
“All of you in this room put them in business in Johnson County,” trial lawyer Dan McDonald said to the crowd at the Cleburne Conference Center. “How do they treat all of us that put them in business? Pretty shabby: pretty doggoned shabby.”
Bob Hurt, who lives near Crowley, decided to become a party to a lawsuit against the Oklahoma energy giant.
“We’re in the same boat as everybody else is,” he said, referring to Chesapeake. “They just do what they want.”
The battle centers over expenses that McDonald, who is himself a disgruntled Chesapeake lessor, says the company improperly withheld when it got into financial trouble after energy prices plunged.
He laid the blame at the feet of former Chesapeake CEO Aubrey McClendon, once America’s highest paid corporate chief.
On a screen McDonald displayed a 2011 Forbes magazine cover identifying McClendon as “America’s Most Reckless Billionaire.”
The article summed up McClendon’s wild ride up that point thusly:
“He is without a doubt the most admired — and feared — man in the U.S. oil patch,” Forbes wrote. “But he’s also the most reckless, the alpha wildcatter with an off-the-charts risk tolerance. It proved nearly fatal in 2008, when extreme leverage, aggressive financing and plunging oil and gas prices combined to crush Chesapeake shares by 80 percent. McClendon was forced to sell nearly all of his own shares to meet margin calls. The company had to write down billions.”
Those financial troubles prompted the company to start deducting expenses that other companies weren’t, McDonald said.
“Aubrey McClendon made an enormous bet that gas prices were going to rise,” McDonald said, noting that between 2004 and 2012, “Chesapeake spent $30 billion more than they took in. Much of it was borrowed.”
- See more at: http://www.cleburnetimesreview.com/local/x864252441/Chesapeake-roya...
Views: 3525
Replies to This Discussion
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Permalink Reply by Skip Peel - Mineral Consultant on -
That's okay. I had my fingers crossed. I haven't found any ruling against CHK that has made it through the entire appeals process. Then again all the Supremes would need to do was decline to hear an appeal. That remains a possibility in this case.
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Permalink Reply by Franks on
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>> I am sure that CHK is quaking in their boots over this. Not.
I have every intention of using the Federal Trade Commission and/or the LA Attorney Generals Office (SHARK TANK), both free, to review both lease and payout.
http://www.ftc.gov/
http://www.ag.state.la.us/Also recently found the Louisiana National Royalty Owners Association, director is local attorney Lee Overton, but their website is NOT USER FRIENDLY.
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Permalink Reply by Skip Peel - Mineral Consultant on
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DJ, I don't think that the FTC or the LA Attorney General will provide review of a proposed O,G&M lease. A number of GHS members have contacted the AG's office over CHK royalty deductions and found that they don't deal with that issue. There are several GHS members who are associated with NARO-LA. They might be of some assistance and I think they would appreciate feedback regarding their website.
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Permalink Reply by Skip Peel - Mineral Consultant on
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There are lawyers ..and then there are experienced O&G attorneys/firms. It is imperative to understand that experienced O&G attorneys are a small specialty in relation to the universe of lawyers. Far too many lawyers think the can get a copy of a mineral code, read through it a few time and look over a few court cases and then claim to be competent to practice that area of expertise.
At least in LA, the AG has been tried...more than once. Feel free to try again.
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Permalink Reply by Zydeco on
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Skip ~ is absolutely 100% correct. this is a very elite and small "gene" pool of specialized lawyers. It has so much to do with Louisiana Law and the interpretation of said laws and previous cases = a great deal of research and experience for O & G issues.
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Permalink Reply by 1kw6x71km1v37 on
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The problem is not that Louisiana oil and gas law is a difficult legal practice area. The problem is that most attorneys are not really qualified to practice law, period.
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We may end up needing a lawyer to go after the AG (just kidding, not...); though I'd imagine that FTC might could get his attention. Just a little humor ;)
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