Antitrust Complaint Against Chesapeake Gas

     OKLAHOMA CITY (CN) – Chesapeake Energy leaseholders sued the company Thursday in a federal antitrust class action, two days after its former CEO Aubrey McClendon was charged with rigging bids and the day after he died in a fiery single-car crash.
     Brian Thieme sued Chesapeake, SandRidge Energy, and former SandRidge CEO Tom L. Ward, seeking treble damages for oil and gas leaseholders. The complaint cites the Tuesday indictment charging McClendon with of conspiring to rig bids in violation of the Sherman Act.
     “The combination and conspiracy affected not only the interests and properties that defendants Chesapeake and SandRidge Energy purchased, but also the overall market,” the 14-page complaint states. “Thus, sellers of leasehold interests and producing properties to entities other than defendants Chesapeake and SandRidge Energy received less value than they would have in a competitive market, despite the fact that they did not sell to Chesapeake and SandRidge Energy.”
     Thieme says the class could include thousands of royalty owners in the Anadarko Basin Region in northwest Oklahoma. Leaseholders have sued Chesapeake more than 800 times in the past three years, claiming it shorted them on royalties from their oil and gas leases.
     Attorney Warren Burns, with Burns Charest in Dallas, said the lawsuit “is about cleaning up the oil patch” and seeks “to promote legal competition” in the industry.
     “In a rush to reap illegal profits, the defendants violated the trust and confidence of these royalty owners,” Burns said in a statement Thursday. “Their actions demonstrate that they were willing to betray my clients and violate the law.”
     McClendon’s estate is not a party to the lawsuit.
     Facing up to 10 years in federal prison and a $1 million fine if convicted, McClendon “pretty much drove straight” into a highway overpass Wednesday morning and died, according to Oklahoma City police.
     Chesapeake, founded by McClendon in Oklahoma City in 1989, is the second-largest natural gas producer in the country. It expanded its business through hydraulic fracturing, or fracking, in major domestic shale formations, including the Marcellus Shale, spanning from West Virginia to New York, and the Barnett Shale in North Texas.
     Hours before Thiele’s lawsuit was filed, federal prosecutors filed a motion to dismiss the criminal indictment against McClendon because of his death. The Justice Department’s antitrust division said Wednesday it was “saddened” to hear of McClendon’s death and offered condolences to his family.
     Chesapeake spokesman Gordon Pennoyer declined to comment on the lawsuit Thursday evening.
     The company said Wednesday it was “deeply saddened by the news” of McClendon’s death. His new company, American Energy Partners, said it would “continue to work hard to live up to the unmatched standards he set for excellence and integrity.”
     The plaintiffs seek damages for violations of the Sherman Act.
     They are also represented by Douglas Wilguess with Wilguess Garrett in Oklahoma City.

%d bloggers like this: