Lawsuit Aims To Stop Chesapeake Asset Sales - News9.com - Oklahoma City, OK - News, Weather, Video and Sports |

Lawsuit Aims To Stop Chesapeake Asset Sales

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OKLAHOMA CITY -

Shareholder demands on embattled Chesapeake Energy continue to mount. Later this week a judge will hear a motion to essentially stop Chesapeake and CEO Aubrey McClendon from moving forward with a key component of its business strategy.

The lawsuit, Lutzker vs. Chesapeake, alleges that McClendon's personal business dealings put him "at odds with shareholders and threaten to destroy the Company he once built." The suit requests the Court grant a temporary restraining order, preventing Chesapeake from selling of any its assets without first getting the approval of an independent third party.

Chesapeake executives have made clear that they hope to raise about $10 billion through the sale of various assets this year. Those funds are seen by industry analysts as being critical to the company's ability to meet promised debt payments, and also to help finance an increasingly aggressive liquids drilling program.

In a response filed earlier this month, Chesapeake argues that, in addition to failing all applicable legal tests, the motion would "inflict massive damage on the corporation [that] Plaintiff and his counsel purport to represent."

"The notion that the Court would insert itself -- or Plaintiff -- into the middle of the complex operations of a major public company," the filing goes on, "is, to put it mildly, misconceived."

Oklahoma County District Court Judge Bryan Dixon is scheduled to hear the motion Friday, May 25 at 1:30 p.m.

Next week, another shareholder motion will be heard in federal court. Mallow vs. Chesapeake requests that the company's annual meeting, currently scheduled for June 8, be postponed, until Chesapeake provides shareholders with additional information about McClendon's compensation and loans.

The recent filing of lawsuits -- more than a dozen have been filed or amended within the last six weeks -- is related to media reports detailing controversial loans McClendon took out to finance his participation in a potentially lucrative company perk.

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