Chesapeake Energy officially filed for bankruptcy. The years of heavy debt was compounded by the impact of the coronavirus on the energy market.
Chesapeake said in a statement Sunday that the company planned to operate business as usually through the Chapter 11 bankruptcy process.
The company entered into a restructuring support agreement which it hopes will help eliminate approximately $7 billion of debt.
Chesapeake said the agreement secures a $600 million commitment of new equity as a part of exit financing.
"Despite having removed over $20 billion of leverage and financial commitment, we believe this restructuring is necessary for the long-term,” Chesapeake Energy CEO Doug Lawler said in a statement.
Because Chesapeake is filing for Chapter 11 bankruptcy as opposed to a Chapter 7 bankruptcy, the company will not be forced to liquidate its assets and cease operations.
The company currently has 1,900 employees across the country. Employees were told that they would not be losing their jobs during this process.
Chesapeake attorneys will be filing a Restructuring Support Agreement Monday in Houston.