Chesapeake Energy Corporation (NYSE:CHK) won a shareholder lawsuit Wednesday in which the company shareholders had alleged that the natural gas producer misled investors by not disclosing certain dealings and liabilities of its former CEO Aubrey McClendon.
District Judge Vicki Miles-LaGrange in Oklahoma City said that the lawsuit didn’t present facts proving that Chesapeake Energy Corporation (NYSE:CHK) or its executives named in the complaint intended to mislead investors, reports the Wall Street Journal.
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However, it’s not the end of the story. There are a number of lawsuits still pending that were filed last year against Chesapeake Energy Corporation (NYSE:CHK) when the governance controversy erupted. It’s the first lawsuit where the court reached a result. The company’s founder CEO Aubrey McClendon resigned last month due to controversies and irregularities.
This lawsuit was filed by investors Dvora and Steven Weinstein in Oklahoma federal court last year. Robert P. Varian, the lawyer representing Chesapeake Energy Corporation (NYSE:CHK) said that the natural gas producer is pleased with the dismissal of securities class action lawsuit. He said the shareholders’ claims were baseless.
Investors like Ontario Teachers’ Pension Plan Board, which was the lead plaintiff, sought damages. The Ontario Teachers’ pension fund had invested in Chesapeake Energy Corporation (NYSE:CHK) between 2009 and 2012, and the company’s stock plunged 60 percent in the same period.
The lawsuit claimed that the Oklahoma City-based company concealed $1.4 billion in obligations, and hid another $1 billion that McClendon had borrowed from firms that debt with Chesapeake. He then used that money to bear his share of drilling expenses.
The controversies that began last year caused the company’s stock to plummet heavily. Judge Vicki Miles-LaGrange ruled that neither the company nor its executives intended to hide corporate liabilities or the former CEO’s borrowings. The judge noted that McClendon didn’t know that not disclosing his personal borrowing would mislead investors.
In July 2012, 13 shareholder lawsuits were consolidated into one. They all had a common theme that Chesapeake Energy Corporation (NYSE:CHK) board breached its fiduciary duties.
Chesapeake Energy Corporation (NYSE:CHK) shares were down 1.14 percent to $19.91 at 10:17 AM EDT.