Chesapeake Energy (NYSE:CHK), the second largest natural gas producer in the U.S., is suing its founder and former CEO Aubrey McClendon, accusing him of stealing confidential information to benefit his other investments.
Chesapeake Energy filed a civil suit in Oklahoma Country District Court on Tuesday, alleging McClendon emailed the confidential drilling information to his personal account and had a staff member print the hard copies for him during his final days at Chesapeake Energy in 2013. This, he did, around “thirty-six hours” following the announcement of his resignation. Chesapeake Energy claims that McClendon used the information to obtain drilling rights in Utica Shale formation for his new company, American Energy Partners. Chesapeake Energy has named McClendon Energy Operating LLC and undisclosed investors in the complaint, though McClendon is not being sued personally.
A few months after McClendon left Chesapeake Energy, American Energy Partner’s subsidiary arranged $1.7 billion to buy 110,000 acres in Utica formation. Chesapeake wants a jury trial, payment of damages and other fees with a permanent ban on the use of the proprietary information either by McClendon or AEP.
McClendon replied through AEP with a lengthy statement saying that he had full right to the information, as per the terms of his severance agreement and that Chesapeake is “wrongly accusing” him of misappropriating information. Chesapeake Energy, on the other hand, has stated that McClendon was authorized to use information about the wells in which he had stakes, but not regarding future drilling activities.
Chesapeake ousted McClendon following a shareholder rebellion triggered as a result of deteriorating cash flows and the revelations related to undisclosed personal loans of $1.55 billion given to McClendon by one of the company’s leading financiers.
Chesapeake Energy will release its fourth quarter results and will host a conference call on Wednesday, February 25. The company’s shares have dropped by 21.7% over the last six months and were priced near $21 a piece at the time of this writing.
