» Chesapeake Energy’s Legal Troubles Worsen

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

facebook twitter google_plus_32

  • Contingency Fees Explained – Podcast
    Double Board Certified Attorney Richard LaGarde talks about contingency fees and why they make sense for certain lawsuits. Allow a few moments after clicking the play icon for video to load.
  • Texas Lottery Operator GTECH Accused of Fraud
    GTECH Corporation, the operator of the Texas Lottery, has been accused of fraud by nearly 1,000 lottery players.  The players, all of whom purchased Texas Lottery Fun 5’s scratch-off tickets, have sued GTECH in state district court in Austin.  The instructions printed by GTECH on each Fun 5’s ticket indicated that if the ticket revealed a Money Bag […]
  • Promoting the Right to Trial by Jury
    Mary Pat and I attended the American Board of Advocates’ national meeting in Naples, Florida. Our organization is developing new plans to teach students the importance of the 7th Amendment right to trial by jury.
  • Injured pedestrian files lawsuit after being hit by Houston Chief of Police
    In September of 2013, while driving a city-issued SUV, Houston Chief of Police Charles McClelland struck and injured a pedestrian who was legally crossing in a crosswalk in downtown Houston. The pedestrian, James Harris, spent a year negotiating with the city for a settlement. But Harris says that the city has yet to make a […]
  • Economists Predict Recession for Houston
    The Houston Business Journal reports that top economists believe Houston is headed for a recession as a result of declining oil prices.  The report cites the last major drop in oil prices in 1986 which led to a regional recession in Texas.   Read the full article here. >>

See other news sources publishing this article. BETA | Tags: , , , , ,



Get headlines from Law Firm Newswire sent right to your inbox.

* indicates required