Chesapeake Energy Ends Bankruptcy Filing Speculations

by San Antonio Attorney

Natural gas and oil giant Chesapeake Energy issued a statement on Feb.  8 that it will not file for bankruptcy.  The company’s stock fell over 50%, which raised speculations that it will declare insolvency.

Chesapeake stock bounced back as reported in the news, but remained lower than 34% in the current trading.

Speculations of bankruptcy filing were started by a report about Chesapeake consulting with a Kirkland & Ellis law firm for restructuring.

The energy company is the country’s second-biggest natural gas supplier and holds the naming rights to the NBA’s Oklahoma City Thunder’s stadium.

Chesapeake’s stock ascended prior to the 2008 financial crisis owing to its considerable natural gas shale investments in various states.  To funds the company’s expansion, Chesapeake took on loads of debt.

Since revenues have been stifled by cheap oil and natural gas prices, the company is fraught to repay almost $11 billion to its creditors.  In 2015, Chesapeake reduced its debt by proposing a debt exchange to investors.

Chesapeake’s former CEO and cofounder Aubrey McClendon was removed from her position in 2013 due to her extravagant lifestyle and over $1 billion in debt secured by her personal shares in the company.

McClendon’s discharge was headed by business magnate Carl Icahn, who is still a major shareholder of Chesapeake.  The billionaire investor holds 11% of the company’s stock.

According to Chesapeake’s official statement, they are making the most of value for everyone who has stakes in the company and that Kirkland & Ellis has been their legal representative for the past six years.

Uncertainties about Chesapeake’s fate are also unnerving pipeline company Williams Cos., whose stock fell 25% on Feb.  8.  The company generates around 20% of its income.

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