April 21, 2016 (Shareholders Foundation) - An investor filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws in connection with 6.875% senior notes due 2020 and 6.125% senior notes due 2021 from Chesapeake Energy Corporation.
According to the complaint the plaintiff alleges on behalf of 6.875% senior notes due 2020 and 6.125% senior notes due 2021 from Chesapeake Energy Corporation (NYSE:CHK) from December 31, 2015 to April 4, 2016, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that on December 2, 2015, Chesapeake Energy Corporation announced a proposed private debt exchange (the Exchange Offer ) through which it would exchange and replace certain Notes, along with certain other notes, for newly-issued 8.00% Second Lien Senior Secured Notes due 2022 (the 8.00% 2L Notes ). Notably, only Qualified Institutional Buyers—generally those that own and invest at least $100 million in securities—were eligible to participate in the Exchange Offer. The plaintiff and non-qualified Institutional Buyers could therefore not participate in the Exchange Offer, nor did they receive the exchange memorandum informing them of how the Exchange Offer would negatively affect their interests in the stated notes. The plaintiff says that importantly, the risk of the Exchange Offer was not disclosed by Chesapeake Energy Corporation in its offering prospectus for the notes stated above, nor could it have been foreseen by the plaintiffs or the other non-qualified Institutional Buyers at the time they purchased their notes.
The plaintiff alleges that Chesapeake Energy Corporation's decision to pursue the transaction benefiting only themselves and a minority of holders of Notes violated the implied covenant of good faith and fair dealing.

Chesapeake Energy Corporation reported that its annual Total Revenue declined from over $23.12 billion in 2014 to over $12.76 billion in 2015 and that its Net Income of over $1.91 billion in 2014 declined to as Net loss of over 14.68 billion in 2015. Shares of Chesapeake Energy Corporation (NYSE:CHK) declined from as high as $30.89 per share in June 2014 to as low as $1.50 per share on February 8, 2016.

On March 1, 2016, a federal grand jury charged Chesapeake Energy's Aubrey McClendon, former CEO, on charges of conspiring with an unidentified company to rig the oil and gas prices in Oklahoma. The indictment alleged that McClendon arranged a campaign to keep the oil and gas bid prices down from 2007 to 2012, during his time as CEO and amid a land-leasing boom across the U.S. On March 2, 2016, Aubrey McClendon died in a car accident. On March 4, 2016, Justice Department filed a motion to dismiss its earlier indictment of Aubrey McClendon. The same day it was reported that a class action lawsuit was filed on behalf of royalty owners alleging Chesapeake Energy Corp., Chesapeake Exploration LLC, Sandridge Energy Corporation, and other defendants conspired to rig bids and depress the market for purchases of oil and natural gas leasehold interests and properties containing producing oil and natural gas wells.

On March 7, 2016, NYSE:CHK shares closed at $5.20 per share.