Chesapeake sued for fixing prices, underpaying landowners

Chesapeake sued for fixing prices, underpaying landowners by Zain Shauk, March 18, 2013
Chesapeake Energy Corp. allegedly manipulated prices and unlawfully passed on its drilling expenses to landowners, shortchanging them on royalty payments for drilling on their land, according to a lawsuit filed in federal court in Dallas. The landowners are led by the billionaire investors Ed Bass and Robert Bass, each of whom have royalty or other interests in all of the land involved in the lawsuit. “We are seeking millions in damages,” attorney Daniel H. Charest told FuelFix. Chesapeake spokesman Michael Kehs declined to comment on the case, citing ongoing litigation.

The landowners previously approached Chesapeake with their concerns, but were not able to reach a new agreement or settlement, Charest said. “The parties engaged in a dialogue that ultimately didn’t bear fruit and we had to proceed with the lawsuit,” he said. Chesapeake continues to produce hydrocarbons from the land and has not altered its payments to the landowners since the issue was raised, Charest said. … Chesapeake is currently under investigation by both the U.S. Department of Justice and the U.S. Securities and Exchange Commission because of several allegations of impropriety. Though the company has said its internal investigations of the incidents have shown no wrongdoing, its CEO is accused of colluding with another company to depress lease values and of taking large personal loans from lenders to which the company was in debt.

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