OKLAHOMA CITY (CN) – Chesapeake Energy held its annual meeting Friday after a federal judge refused to give angered shareholders more time to learn about executive compensation.
It was abruptly disclosed in April that Chesapeake Energy CEO Aubrey McClendon could borrow more than $1.1 billion from, among others, a private equity group that was in negotiations with Chesapeake to buy the company’s assets. The loans were secured by McClendon’s stake in company wells.
At least six groups of shareholders then filed federal complaints against McClendon and the company, alleging violations of securities law. They soon after filed for a preliminary injunction, claiming the defendants “failed to disclose material information necessary to allow Chesapeake shareholders to cast a fully informed vote” at the upcoming meeting.
On Wednesday, U.S. District Judge Vicki Miles-LaGrange said the shareholders failed to prove they would suffer irreparable injury without an injunction. They would also still have an adequate remedy.
“If this court were ultimately to conclude that defendants failed to disclose material information in the 2012 proxy, the court can void the shareholders’ vote on the voting items related to that material information and order that those voting items be resubmitted to the shareholders,” Miles-LaGrange wrote.
The items that were set for a vote furthermore do not involve complex business transactions, according to the 10-page order.
“Plaintiffs are not attempting to enjoin a merger or other corporate activity which would require the court to ‘unscramble the eggs’ if preliminary injunctive relief were erroneously withheld,” McClendon wrote.
Shares of Chesapeake lost as much as 29 percent of their value in the weeks after the loan disclosure.