» 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

  • GTECH Files Motion for Summary Judgment in Fun 5’s Case
    GTECH (International Game Technology) has filed a Motion for Summary Judgment in the Fun 5’s case pending in Austin.  The motion alleges that there are elements to the Plaintiffs’ causes of action that they will not be able to prove at the time of trial.  GTECH has asked the court to hold a hearing on […]
  • GTECH Files Appellee’s Brief in Dallas Court of Appeals
    GTECH (International Game Technology) has filed its Brief of Appellee in the Dallas Court of Appeals in Dawn Nettles’ Fun 5’s lawsuit.  Here is a summary of GTECH’s arguments: “Under Texas law, when a government contractor is sued for complying with directions it received from an entity with governmental immunity, the contractor is likewise entitled to immunity. […]
  • Plaintiffs’ 3rd Amended Petition
    For those of you reading the Brief of Appellant filed by GTECH (International Game Technology) in the Fun 5’s case yesterday, you may want to also review the allegations raised by the Plaintiffs in their Plaintiffs’ Third Amended Petition.
  • GTECH Files Appellate Brief in Fun 5’s Lawsuit
    GTECH (International Game Technology) filed its Brief of Appellant today in the Court of Appeals for the Third District of Texas at Austin.  In summary, GTECH argues that it merely did what it was told to do by the Texas Lottery Commission.  Therefore, GTECH asserts that it is entitled to immunity from liability for fraud under […]
  • Author of Lottery Petition to Meet with Representative of Governor Abbott
    Denice Deckard, the author of  a petition to restore honesty and fairness to the Texas Lottery Commission, is scheduled to meet with Jared Staples, Policy Advisor to Texas Governor Greg Abbott tomorrow, June 22nd.  Ms. Deckard started a petition on Change.org in reaction to the Fun 5’s scandal involving misleading lottery scratch-off tickets that were designed by […]

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



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

* indicates required