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Follow on Google News | Chesapeake Energy Corporation Investor Alert: Lawsuit Deadline on June 25A Deadline is coming up on June 25, 2012 in lawsuit for investors in Chesapeake Energy Corporation and NYSE-CHK stockholders should contact the Shareholders Foundation at mail@shareholdersfoundation.com
Investors with a substantial investment in NYSE-CHK shares between April 30, 2009 and April 17, 2012, should get active before the Deadline that is coming up on June 25, 2012, and should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554. According to the complaint filed in the U.S. District Court, Western District of Oklahoma the plaintiff alleges on behalf of purchasers of Chesapeake Energy Corporation common stock between April 30, 2009 and April 17, 2012, that Chesapeake Energy Corporation violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The plaintiff alleges that the CEO has participated aggressively in this program, and amassed interests currently valued over $300 million. However, because of large up front development and operating costs, CEO's FWPP interests are significantly underwater and have yet to generate any positive cash flow. The plaintiff claims that unbeknownst to investors, starting in 2009, McClendon leveraged all of his FWPP interests in order to pay up front development costs. The plaintiff says that he not only secured loans on his ownership interests in the wells, but also sold off revenue "participation rights" in the wells. Furthermore, so the plaintiff, the CEO also secured a personal loan in excess of $500 million from EIG Global Energy Partners, a hedge fund that engaged in financing transactions with Chesapeake. As a result, by year end 2011, McClendon had amassed personal debt on Chesapeake Energy Corp. related wells, and from Chesapeake Energy Corp business partners, exceeding $1 billion. The plaintiff says that the size of the debt, and McClendon's leveraging of all his FWPP related interests, represented material undisclosed risks to Chesapeake Energy investors. On April 18, 2012, media report was published concerning potential conflicts of interest created by personal loans to Chesapeake Energy’s chief executive officer, Aubrey McClendon. According to the article, during the past three years McClendon borrowed approximately $1.1 billion by pledging his personal stake in Chesapeake Energy's oil and natural gas wells as collateral for the loans, which were made through three companies controlled by McClendon that list Chesapeake Energy’s headquarters as their address. The article said that “The money is being used to help finance what could be a lucrative perk of [McClendon’s] Then on April 26, 2012, Chesapeake Energy Corp abruptly terminated the FWPP program, while Board members disclaimed any knowledge of the size of the loans to the CEO. Shares of Chesapeake Energy Corporation fell from over $25 per share in the end of March to as low as $13.55 on May 17, 2012. Those who purchased shares of Chesapeake Energy Corporation have certain options and should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554. End
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