Chesapeake CEO Fails to Disclose $1.1 Billion in Loans -- Reuters (CHK)

Energy

Published: April 18, 2012 9:37 am

Last Updated: April 18, 2012 9:39 am

Chesapeake Energy Corp. (NYSE: CHK) CEO Aubrey McClendon has received loans totaling $1.1 billion in the last three years backed by his share in Chesapeake’s wells. Under the terms of his employment contract, McClendon may take up to a 2.5% interest in every well that the company drills. Neither McClendon nor Chesapeake has disclosed the loans to shareholders.

According to an exclusive report at Reuters, McClendon uses the borrowed funds to as operating funds to support his share of the wells:

The size and nature of the loans raise questions about whether McClendon’s personal financial deals could compromise his fiduciary duty to Chesapeake investors, experts who reviewed the documents told Reuters.

McClendon and the company deny any conflict of interest, and McClendon told Reuters, “There are no covenants or obligations in my loan documents or mortgages that bind Chesapeake in any way.”

Chesapeake’s shares are down about -2.5% at the market open this morning, at $18.65, a new 52-week low. The 52-week high for the shares is $35.75.

Paul Ausick

Take Charge of Your Retirement In Just A Few Minutes (Sponsor)

Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor.

Here’s how it works:

Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.

Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!