Remember how Chesapeake Energy folks complained (is whined too strong a word?) about the 2007 Roane County Circuit Court jury award of about $404 million in compensation and penalties?
In the class-action “Tawney case,†people who sold natural gas to Chesapeake and its predecessors — Triana Energy, NiSource Inc. and Columbia Natural Resources — alleged they were cheated out of some of their royalty payments, and the jury agreed.
Chesapeake CEO Aubrey McClendon, in his parting shot at the state last month, said the W.Va. Supreme Court’s refusal to hear an appeal of the Tawney case had a lot to do with the company’s decisions to cancel plans to build a $40 million regional headquarters in Charleston and, ultimately, eliminate 215 valuable jobs here.
You might logically conclude Chesapeake was forced to fork over $404 million to its gas lease-holders and their lawyers. You would be wrong.
As the Gazette’s Ken Ward reported last Oct. 25, the Roane Circuit Court approved a preliminary settlement in the Tawney case in which NiSource Inc. — not Chesapeake — would pay most of the bill.
NiSource, which bought Columbia Natural Resources and then sold it a few years later, announced it would pay $338.8 of the proposed $380 million settlement. The Indiana energy company sold CNR to Triana Energy, which in turn sold it to Chesapeake in 2005.
That meant Chesapeake, at most, was on the hook for $41.2 million — a far cry from the original $404 million jury award. At the time, Chesapeake didn’t even issue a press release, like NiSource did, so it would seem the matter was not all that important to the company.
Chesapeake said as much in its quarterly financial report (10-Q) a few weeks later to the U.S. Securities and Exchange Commission, and again in its annual 10-K report March 2 (page 30). To wit:
As the company said in the Nov. 10, 2008, 10-Q report (page 14):The Circuit Court for Roane County, West Virginia approved the settlement following a fairness hearing on November 22, 2008, and entered an order to discharge the judgment on January 21, 2009. Chesapeake’s share of the settlement fund was approximately $41 million, which amount had previously been fully reserved.
Chesapeake believes this litigation will not have a material adverse effect on its results of operations, financial condition or liquidity.
So, in the inimitable words of Clara Peller, where’s the beef?
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Maybe they don’t approve of the Legal System in Wva.
Hey JimBo, If you are getting screwed, and it is not right, it makes no difference if it is $404 million or $41 million it still hurts. Why not talk about changing the appeal process in Wva?
You are uneducated…and an idiot.
Without offending your upbringing, you sound the part of (un -educated and an idiot). Lets see the building was going to cost $40 million and Chesapeake was sued and paid $41 million so there went the $40 million dollar building. Sadly, it also cost the workers of Wva. 251 jobs. Maybe an appeal might have changed all that. How’s that for an uneducated, idiotic persons thinking?
Eh
Ya know, somehow we have this idea that every out of state corporation which does business here should be a target for lawsuits. When the next 6 people in line at Kroger decide a company has to pay $41 million to their neighbors, and there is no appeal from that decision, companies take their business elsewhere – and in the case of Chesapeake take 215 excellent jobs with them. Hey Jim, you might want to ask the folks at the paper how they would feel if a local jury hit them with such an award. Maybe then the tune would change, eh?