April 10 Chesapeake Energy Corp has won
the dismissal of a securities class action lawsuit over
allegations the company misled investors about its financial
The lawsuit claimed that Chesapeake had failed to disclose
financial obligations by the company and its former chief
executive, Aubrey McClendon.
But in an order issued on Wednesday, Chief U.S. District
Judge Vicki Miles-LaGrange in Oklahoma City wrote that the
allegations failed to present facts showing the company or other
company officers and directors named in the complaint likely
intended to mislead investors.
The decision comes at a challenging time for the natural gas
giant. Last year Reuters wrote a series of stories outlining
McClendon's complex financial relationship with the company.
Regulatory scrutiny and lawsuits against the company ensued.
The departure of McClendon as CEO was announced by the
company in late January.
The case dismissed on Wednesday was filed on behalf of
investors who purchased Chesapeake shares between April 30, 2009
and May 11, 2012. It alleged that the company and its management
team did not disclose more than $1 billion in personal debt
accumulated by McClendon that was backed by future production of
When investors learned the truth of McClendon's dealings
with the company, the lawsuit claimed that the price of
Chesapeake's shares tumbled.
But in her opinion, Miles-LaGrange found that the complaint
did not give rise to a "strong inference that McClendon knew
that not disclosing his personal loans would somehow mislead
Robert Varian, an attorney for Chesapeake, applauded the
decision in a statement.
"We are pleased with the court's complete rejection of the
claims, which were based on unfounded accusations that were
given widespread attention in the media," he said.
An attorney for the Ontario Teachers' Pension Plan Board,
the lead plaintiff in the case, did not return a message seeking
The case is Dvora Weinstein v. Aubrey McClendon, U.S.
District for the Western District of Oklahoma, No. 12-465.