Class-action suit filed against Chesapeake, SandRidge

Former Chesapeake CEO McClendon found dead after federal indictment earlier this week.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  March 4, 2016 at 6:33 AM
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DALLAS, March 4 (UPI) -- Chesapeake Energy and SandRidge energy worked to rig bids and limit competition for oil and gas acreage in Oklahoma, a class-action suit alleges.

Dallas-based law firm Burns Charest LLP filed the suit, Thieme v. Chesapeake Energy Corp., et al., on behalf of royalty owners alleging the companies manipulated the lease programs for the Anadarko basin in northwest Oklahoma.

"This case is about cleaning up the oil patch," managing partner Warren Burns said in a statement. "In a rush to reap illegal profits, the defendants violated the trust and confidence of these royalty owners.

The class-action suit followed an indictment against former Chesapeake CEO Aubrey McClendon for conspiracy to rig the leasing process in Oklahoma. The federal indictment alleged Chesapeake worked with second unnamed company to decide who ahead of time would win the leases and then allocate shares to the respective other company.

"His actions put company profits ahead of the interests of leaseholders entitled to competitive bids for oil and gas rights on their land," U.S. Assistant Attorney General Bill Baer said in announcing the charges earlier this week.

McClendon co-founded Chesapeake alongside Tom Ward and helped establish it as a leader in the U.S. shale natural gas industry. Ward, named in the class-action suit filed by Burns Charest, later went on to become chairman and CEO at SandRidge.

McClendon died in a single-vehicle crash in Oklahoma City, one day after the federal indictment was released.

Burns Charest last year won a confidential settlement with Chesapeake for unpaid royalties related to oil and gas properties in Texas.

There was no statement from either company on the class-action suit.

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