Federal Judge Reschedules Hearing To Delay Chesapeake Shareholder Meeting

By Jeff Raymond, Oklahoma Impact Team

OKLAHOMA CITY - A federal judge has rescheduled a hearing to delay Chesapeake Energy's upcoming annual shareholder meeting. The hearing, which was to have taken place Wednesday afternoon, has been rescheduled for 10 a.m. on June 5.

Several shareholders sought a preliminary injunction to postpone the June 8 meeting until the company provides greater information about CEO Aubrey McClendon's personal loans using his stake in company wells as collateral, potential conflicts of interest related to the loans, and other well-related financing arrangements.

Chesapeake History Timeline

"The board's continued refusal to disclose McClendon's financial conflicts and all of the ways in which it has secretly agreed to permit him to use his position at the company for his own personal gain, have caused and continue to cause irreparable harm to the company," shareholder attorneys wrote in court filings. 

In arguing for the injunction, the shareholders said greater information is needed before they and others can make informed decisions about items up for vote at the meeting – among them, a change in executive compensation and the reelection of directors Burns Hargis and Richard Davidson. 

Read More About The Proposed Injunction.

In related news, a state judge on Friday denied a request for a restraining order in a related lawsuit. In the 2009 case, which dealt with alleged omissions on a 2008 Chesapeake stock offering, shareholders asked District Judge Bryan Dixon to block the company from buying assets from McClendon, paying him a bonus "out of cycle" or selling company assets without detailing his well-related debts.

Read More About The Lawsuit Against Chesapeake.

In court filings, Chesapeake argued that information on McClendon's well stakes and company finances have been widely publicized through regulatory filings and news coverage. Additionally, the company argued, postponing the meeting is a drastic measure that would negatively affect Chesapeake's operations and improperly place the courts in the middle of managing a large corporation.   

Read More On Chesapeake's Response.

"The suggestion that shareholders have not been provided sufficient information cannot withstand even superficial scrutiny," the attorneys wrote in court filings.