Chesapeake Energy’s Legal Troubles Worsen
Houston, TX (Law Firm Newswire) July 28, 2014 - An appeals court upheld a judgment against an oil and gas giant that backed out of a deal to buy Texas leaseholds.
Chesapeake Energy lost its appeal of a $121 million judgment in a lawsuit filed by Preston Exploration and two other parties, who said they had finalized a deal to sell over 500 leaseholds to the company. In continuing bad news for Chesapeake, a Texas school district and newspaper filed separate lawsuits against the company, alleging underpayment of royalties.
Houston attorney Richard LaGarde, who is not involved in the lawsuits, gave a rundown of Chesapeake's mounting legal woes.
“The loss on appeal may be the end of a long legal battle for Chesapeake,” LaGarde said. “The three plaintiffs said the company backed out of a done deal after natural gas prices plunged.”
Previously, Chesapeake had persuaded a federal judge in Houston that the contracts for sale had not been finalized before the company called off the deal. But landowners successfully appealed that ruling, and in 2012, won a nine-figure judgment in a new trial. Chesapeake then appealed that ruling on the grounds that Preston Exploration did not have legal title to some $9 million worth of leases. The appeals court rejected the argument, saying Preston had “satisfied all conditions” of the deals.
Just weeks later, two new lawsuits were filed against the company in as many days.
The first came from the Fort Worth school district, which claims that Chesapeake improperly deducted its own expenses from royalties paid to the district.
“The lawsuit says that Chesapeake promised the district cost-free royalties while negotiating the leases, but then started charging for costs,” LaGarde explained.
The second was filed by the Fort Worth Star-Telegram. The newspaper also claims Chesapeake underpaid royalties, alleging improper deduction of expenses on one lease and a failure to pay any royalties on a second.
“It's too early to tell the strength of these new lawsuits, but even without them, Chesapeake is in a lot of trouble,” LaGarde said.
Chesapeake Energy, based in Oklahoma City, is the second-largest natural gas producer in the U.S. It also faces pending lawsuits from the cities of Fort Worth and Arlington, the Arlington school district, and two separate groups of Forth Worth residents.
LaGarde Law Firm, P.C
3000 Weslayan, Ste. 380
Houston, TX 77027
Phone: (713) 993-0660
Toll Free: 1-866-LAGARDE
LaGarde Law Firm, P.C.
Jason M. Welborn - Of Counsel
617 S. Buchanan Street
PO Box 2053
Lafayette, LA 70501
Phone: (337) 443-4100
Toll Free: 1-866-LAGARDE
- Hurricane Matthew
Our thoughts and prayers go out to all our clients who are living in Florida, Georgia, and the Carolinas. Stay safe.
- GTECH Files Reply Brief
GTECH filed its Reply Brief in the Austin Court of Appeals. In its brief, GTECH maintains that it did not exercise any discretion in deciding to use misleading language on the Fun 5’s scratch-off tickets. GTECH urges the Court of Appeals to overrule the trial court and to hold that GTECH is entitled to immunity […]
- Nettles Files Reply Brief in Fun 5’s Lawsuit Appeal in Dallas
Attorneys for Dawn Nettles have filed a Reply Brief on behalf of Ms. Nettles in her appeal of a Dallas trial court’s ruling that GTECH enjoys “derivative immunity” for fraud lawsuits. A copy of Ms. Nettles’ brief can be viewed by clicking on the link below: Nettles Reply Brief
- Plaintiffs and Hiatt Intervenors File Amended Pleadings
The Plaintiffs in the Fun 5’s lottery game lawsuit against GTECH (International Game Technology) have filed their Fourth Amended Petition along with an Exhibit “A” which lists the names of the Plaintiffs who have sued GTECH. The Hiatt Intervenors have also filed a Second Amended Petition and 7th Supplemental Petition that lists the names of […]
- Plaintiffs File Appellee’s Brief in Fun 5’s Lawsuit
The Plaintiffs in the Fun 5’s lawsuit against GTECH (International Game Technology), filed their Brief of Appellees in the Austin Court of Appeals yesterday. A copy of the brief can be read >>here<<.