The lawsuits arise out of revelations about CEO Aubrey McClendon, his perks and compensation, and certain business strategies he pursued to his own benefit and the detriment of the company. Mr. McClendon took $1.1 billion in loans against personal stakes in the company’s oil and gas wells he obtained under the Founder’s Well Participation Program. To bail himself out of financial problems, and maximize his own gains, Mr. McClendon pursued an aggressive expansion strategy for Chesapeake and piled on enormous debt through off-balance sheet arrangements that were not disclosed on the company’s balance sheet.
He also borrowed from firms that transacted business with Chesapeake, creating huge conflicts of interest. Mr. McClendon additionally ran a lucrative business on the side: a $200 million hedge fund that traded in the same commodities that Chesapeake produces from the company’s offices.
Categories: Class Actions of Interest