A land owner caught between energy giants

A land owner caught between energy giants by Joshua Scneyer and Brian Grown, June 26, 2012, Reuters in The Globe and Mail
A Michigan land owner who alleges he was jilted by two of North America’s largest energy companies says e-mails made public Monday by Reuters prove that the two companies colluded to kill deals that could have earned him more than $54-million. Walter Zaremba, who is locked in litigation with Encana Corp., Canada’s largest natural gas producer, said he has long suspected that Encana and Chesapeake Energy Corp. had been working together, which would be a possible violation of state and federal antitrust laws. … Law professor Mr. Robinson, a former general counsel for automotive industry giants including Delphi and Chrysler Corp.’s international division, said Encana’s claim technically may be correct. “Maybe they talked about cooperating,” Mr. Robinson said of Encana and Chesapeake, “but didn’t do it.” Even so, he called the e-mail exchanges between the two companies “a general counsel’s nightmare.” The e-mails reviewed by Reuters do show that the two companies discussed how to handle negotiations with at least nine private land owners – and the details about how to handle Mr. Zaremba’s situation are the most specific. … Today, Mr. Zaremba is seeking at least $60-million in damages from Encana, and accuses the company of fraud and conspiracy. In a lawsuit filed in federal court in Michigan this month, Mr. Zaremba alleges that “in order to avoid a continued bidding war with Chesapeake, Encana attempted to lock in the Zarembas (and other landowners), then cancel the deals, divide up the market with its competitors (including Chesapeake), so that it could make later offers to the Zarembas (and other landowners) for mere pennies on the dollar.” Encana is suing the Zaremba family to return most of the $2-million the company gave them in “earnest money” pursuant to the land deal that was later cancelled. In its lawsuit, the company said that the letter of intent it signed with Mr. Zaremba stated that “neither party shall have any liability” if it failed to consummate the land transaction for any reason.