Reports Chesapeake's (CHK) CEO Borrowed Over $1 Billion Against Stake in Company

Reuters reports that Chesapeake Energy's CEO (NYSE: CHK) has made some moves, on a personal level, that are raising red flags. According to the report, Aubrey McClendon, has essentially borrowed/leveraged as much a $1.1 billion (in the past few years) against his stake in thousands of company wells.

This conflict of interest has been noted by analysts and attorneys, however, the CEO has an apparent deal with Chesapeake that enables him to invest a 2.5% stake in every well drilled by the company. What McClendon seems to do, is leverage that stake by taking out cash loans.

McClendon reportedly responded to Reuters, saying there were no covenants/obligations (from his loans) that bind Chesapeake in any way.

Although, with plunging nat gas prices, $1.1 billion does still raise some concern. Also of note, McClendon's largest personal lender, EIG Global Energy Partners, has also been a big financier for Chesapeake (over $2 billion)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• IBM tumbles on soft Q1 revenue; announces HashiCorp $6.4bn acquisition
• HP Inc. (HPQ) Climbs Following Stake by Greenlight Capital
• Is China exporting deflation? BoFA weighs in