Chesapeake Energy is suing Aubrey McClendon, the man who co-founded the company and, as its President and CEO, helped turn it into one of the nation's top oil and gas companies.
The lawsuit, filed Tuesday in District Court in Oklahoma County, names several companies associated with McClendon, including American Energy Partners (AEP), which he started up shortly after leaving Chesapeake in 2013.
In a statement on the AEP web site, McClendon called the lawsuit, not only “baseless,” but an “insult.”
Chesapeake, under new CEO Doug Lawler, has been dealing with a number of what it calls 'legacy' issues since McClendon left the company in 2013. In those cases, the company's high debt, lawsuits over leasing practices in Michigan, Chesapeake has generally defended the former CEO's actions. Not anymore.
In the lawsuit, Chesapeake alleges that “Unbeknownst to [them], in McClendon's last days at Chesapeake he misappropriated highly sensitive trade secrets from the company.” That information, according to court documents, had to do with “open” acreage in the Utica Shale. The suit goes on to claim that McClendon “used these trade secrets for the benefit of AEP.”
Chesapeake spokesman Gordon Pennoyer issued the following statement: “We believe that pursuing these legacy claims is in the best interest of the Company and its shareholders. Chesapeake remains focused on delivering top quartile performance and driving shareholder returns.”
McClendon is vowing to fight the lawsuit “vigorously.”
AEP's statement said McClendon's severance agreement with Chesapeake very clearly spelled out his right to “own and use this information for his own purposes.” McClendon said the agreement was “extensively negotiated” and was “approved by Chesapeake, its attorneys, and its Board and filed with the SEC in April 2013.”
“Now it appears,” McClendon stated, “that Chesapeake wishes it had not agreed to the deal it made with Mr. McClendon and has sued to break those promises.”
The lawsuit did not seek a specific dollar amount in damages, but asked for things such as payment for “all losses sustained by Chesapeake as a result of Defendants' wrongful conduct.”
Mr. McClendon also included this in his statement: “It is beyond belief that the company that I co-founded 25 years ago and where I worked tirelessly to build it into one of America's largest and most successful oil and gas producers has now decided to add insult to injury almost two years to the day after my resignation by wrongly accusing me of misappropriating information. Under my agreements with Chesapeake, I am entitled to possess and use the 20 terabytes of information I own. It is a sad day to see Chesapeake stoop so low as to sue its co-founder for having information that was earned, paid for and provided through my contracts with Chesapeake.”
In response, Chesapeake's Pennoyer stated: “We strongly disagree with Mr. McClendon's and AEP's allegations and will address them in the appropriate forum.”