Chesapeake Energy Evaluates Possible Chapter 11 Bankruptcy


Tuesday, May 12th 2020, 7:29 am
By: Caleb Califano


OKLAHOMA CITY -

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.