Chesapeake Energy Evaluates Possible Chapter 11 Bankruptcy

Oklahoma City based Chesapeake Energy is planning to pay millions to top executives as it inches towards chapter 11 bankruptcy.

The paperwork says Chesapeake will pay out $25 million in incentives to 21 top executives to keep them motivated as the company prepares to file for bankruptcy.

Chesapeake's financial problems really come from two factors: the impact from COVID-19, and the international price war for oil. That's why the company may face a potential foreclosure.

In a SEC filing, the company says it's evaluating a complete restructure and reorganization under chapter 11 bankruptcy.

Chesapeake is reporting a more than $8 billion loss in the first quarter of 2020.

Chesapeake stock also took a hit this week falling more than 12 percent.

In its filing to the SEC, Chesapeake says there's no guarantee bankruptcy would fix their financial problems saying in part quote: "There can be no assurances that the company will be able to successfully restructure its indebtedness, improve its financial position or complete any strategic transactions. As a result of these uncertainties … management has concluded that there is substantial doubt about the company's ability to continue as a going concern."

Chesapeake also says if their financial promises for the fourth quarter of this year are not waived, it could result in default.