Chesapeake Energy Chief Executive Aubrey McClendon has agreed to buy back the collection of antique maps that he sold to the company back in 2008. The purchase price: $12 million plus 2.28% interest.

Chesapeake Energy Lawsuits Pit Billionaire Against Billionaire
Christopher Helman
Forbes Staff
The transaction was one of the terms of a legal settlement between Chesapeake and a shareholders group. The terms of the settlement were revealed Wednesday and still await final approval by the district court of Oklahoma County.

The shareholders had sued the company over what they considered to be an irresponsibly generous compensation package granted McClendon in 2008–a package in which the company had bought McClendon’s maps.

Both Chesapeake and McClendon faced some tough times in 2008. When gas prices plunged in the second half of that year, so did Chesapeake shares. The slide was so severe that McClendon, who had borrowed heavily against his shareholdings, was forced in October 2008 to sell more than 90% of his stock to meet margin calls, wiping out most of his $2 billion fortune. The dumping of McClendon’s 30 million shares into an already bearish market drove down Chesapeake shares further. At the nadir, shares were off 85% from their high earlier in the year.

To help him claw back his fortune–and, says Chesapeake, to reward McClendon for $1 billion worth of joint venture deals he had landed earlier in the year–the board granted him a $110 million pay package that included $75 million to buy interests in Chesapeake wells, a $20 million stock grant, and $12 million to buy his map collection. Other perks from the package included $600,000 for the private use of the corporate jets, nearly $600,000 for accounting services and $131,000 for personal “engineering support.” Chesapeake also agreed to pay $4.6 million to sponsor the NBA’s Oklahoma City Thunder, of which McClendon owns one-fifth.

http://www.forbes.com/sites/christopherhelman/2011/11/03/in-legal-settlement-chesapeakes-mcclendon-to-buy-back-antique-maps/

Did this article/news get any play in the local press last month?

Yes.

I don't understand this. When you buy something, you can't just whine and sue to get a refund like that. They bought it. If there is No Refund policy, then so be it. Not happy? Go sell it somewhere. Unless someone want to clarify this silliness?

Aubrey personally acquired a collection of maps. As CEO, he had CHK buy the map collection using corporate funds. 1) Conflict of interest; 2) Non-transparent; 3) FMV undetermined; 4) Other people's money. The "other people" (aka shareholders) didn't like it and sued. The problem wasn't that CHK bought a collection of old maps to adorn the corporate offices, it was the way in which it acquired the maps. There are many other CHK expenditures that people find objectionable, this was just one of the most egregious.

Okay, so he used the company's money to buy maps. He should be fired, charged, and found guilty of fraud and theft.

Okay, so he used the company's money to buy maps. He should be fired, charged, and found guilty of fraud and theft.


He doesn't work there anymore from my understanding and what did he do that was illegal?

He doesn't work there anymore from my understanding and what did he do that was illegal?

Didn't you read what he said? The guy used company's money for private purchase.

He doesn't work there anymore from my understanding and what did he do that was illegal?

It's not really what McClendon did, it's what the Board of Directors did. A BoD can do whatever it wants as long as it's justifiably good business. Here, we had a settlement. There's no admission that anything bad was done, just some money paid to the plaintiffs and a deal rescinded. Can we infer that the CHK board thought that they'd lose if they went to trial? Hell yes. Is the settlement a direct admission of any malfeasance? Nope.

He doesn't work there anymore from my understanding and what did he do that was illegal?

He is still listed as chairman of the board and CEO, unless you are talking about one of the plaintiffs and not McClendon.


Didn't you read what he said? The guy used company's money for private purchase.

The company bought a collection of antique maps used for decoration from of the corporate offices from him at an amount that some shareholders disagreed with. Their are not laws against spending millions on decor, if it had been purchased from any other source then their is not as much the shareholders could enforce any action on, the only way to know if the price was close to accurate would be to sell them at auction. The maps were not even a majority of the compensation package they did not like just the only part Chesapeake seem to felt went far enough to claw back, a couple of the other things agreed to sound like token changes given how much less stock he controls.