Chesapeake Energy Deals With Pennsylvania Landowners Overturned

Chesapeake Energy Corp.'s post-bankruptcy royalty fee settlements with about 23,000 Pennsylvania landowners were approved without jurisdictional authority, the Fifth Circuit ruled.

The Oklahoma-based oil and gas producer had agreed to pay about $6.25 million in cash settlements to settle class allegations of underpaying royalties to the landowners. But the deals conflicted with Chesapeake’s 2021 bankruptcy plan and were jurisdictionally barred, the US Court of Appeals for the Fifth Circuit ruled Thursday, overturning approvals by the US Bankruptcy Court for the Southern District of Texas and a federal district court.

All but 161 of the landowners failed to file claims in ...