As part of a settlement of a lawsuit that charged Oklahoma Billionaire Aubrey McClendon with theft of trade secrets when he left the company, Chesapeake Energy Corp. has withdrawn its claim for more than $455 million against his estate.
An Oklahoma City probate judge recently approved a settlement between Chesapeake Energy and the estate of the late Aubrey McClendon, according to KOCO News 5’s report, “Settlement erases some of Aubrey McClendon estate debts.” The settlement stipulates that Chesapeake would stop trying to collect undisclosed compensation and benefits previously paid to McClendon and agreed to pay $3.5 million in costs and legal fees. In return, the estate waived any claims to unpaid compensation and rights to benefits, including the use of a corporate jet and stock.
There are still several other claims that remain against the estate.
The agreement settled Chesapeake’s lawsuit against McClendon. He left the company he founded over differences with a new board of directors. The lawsuit claimed that McClendon used stolen trade secrets to benefit a new company he formed, American Energy Partners LP.
Numerous claims against the estate remain. The largest is a $464.3 million claim by Williams Trust for loans secured by McClendon. Court documents show an undisclosed amount of the trust’s claim was rejected by the executor of McClendon’s estate in August.
It was once estimated that McClendon had a net worth of over $1 billion. However, creditors’ claims may wipe out that fortune. He may have debts that total over a billion dollars, so his net worth may be close to zero.
Many of the details of the claims are not public. They are either filed under seal or redacted from court filings.
McClendon owned 20% of the NBA’s Oklahoma City Thunder, an asset creditors believe to be his most valuable, worth about $200 million. Forbes estimated in February that the team is worth $1.025 billion. Creditors said in a May 2016 hearing that McClendon’s ownership stake could be sold to a family member at less than market value. However, the estate’s attorney remarked that the team interest was not for sale.
McClendon used his stake in the NBA franchise to secure a loan from a bank that filed a claim for $87 million.
McClendon was a generous supporter of charitable organizations. Many of their claims have been rejected. One, the Boy Scouts, said it wouldn’t pursue its claim, while another, the Reagan Foundation, remains a party to the probate case. Duke University also filed a claim last year for the nearly $10 million that he’d pledged to various projects at his alma mater, but the claim was withdrawn.
One day after being indicted by a grand jury for allegedly conspiring to rig bids to buy oil and natural gas leases, McClendon was killed when his car slammed into a concrete bridge embankment. He was travelling at nearly 89 miles per hour. There was no suicide note, or anything to indicate that the collision was deliberate. However, the police said that he drove straight into the wall with no correction.
Reference: KOCO News 5 (March 11, 2017) “Settlement erases some of Aubrey McClendon estate debts.”