Chesapeake Energy Corp., led by founder and CEO Aubrey McClendon, Trinity ’81, has seen a sudden decline in share prices and outcry from investors following news that McClendon borrowed heavily to buy a personal stake in the its natural gas wells.
McClendon allegedly borrowed approximately $1.1 billion over the last three years and used his stake in Chesapeake’s natural gas and oil wells as collateral, Reuters reported April 18. McClendon’s stake stemmed from a company perk that allowed him a 2.5 percent cut of the profits from the wells he owns but also requires him to cover 2.5 percent of the costs.
Chesapeake share prices dropped 7.7 percent to $17.65 following this news, the Associated Press reported Saturday. A shareholder filed a lawsuit against McClendon, Chesapeake Energy and members of the company’s board of directors in the U.S. District Court of Oklahoma City April 19.
Share prices for the company have been down 27 percent in the last month, peaking at $24.66 in March and closing at $18.00 Monday.
McClendon and his wife Kathleen, Trinity ’80, have given millions to the University, including gifts that helped build McClendon Tower and the West Campus Plaza.
Chesapeake, based in Oklahoma City, is the second largest natural gas producer in the United States.