Mineral wrongs

This seems like it could be just a simple mixup, but nothing in the energy biz is simple anymore:

A Hancock County [WV] couple whose mineral rights were used without their knowledge as collateral for a $500 million loan have filed suit against Chesapeake Energy affiliates, claiming Chesapeake’s debt was improperly recorded as a lien against their property.

Homeowners John and Jacqueline Bird of New Manchester filed the suit in Hancock County Circuit Court, saying the enormous lien has imperiled their ability as property owners to buy, sell or borrow against their property, “thereby depreciating its market value, restricting plaintiffs’ full use and enjoyment of the property, and hindering plaintiffs’ rights …”

The suit, which seeks class action status, also claims the landsman who arranged the deal, Chris Turner, prepared, explained and modified legal documents, including leases, even though he was not an attorney.

Says counsel for the plaintiffs:

[T]he Birds signed “what they thought were leases, though there’s a question (now) whether it was a lease or an option. They signed it because they hoped to get some royalties… What they didn’t know or understand because it was never told to them was that their lease would become collateral for a $500 million loan, that there would be a lien on the property of every person who is in the class.”

Which could be as many as five hundred.

Chesapeake, perhaps not surprisingly, has petitioned to move the case to U.S. District Court.

(Via Cheri Campbell.)





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