On May 8, 2012, our firm and its co-counsel commenced a lawsuit on behalf of a shareholder of Chesapeake Energy Corporation (“Chesapeake”), challenging breaches of the duty of loyalty by the board of Chesapeake Energy Corporation (the “Board”) in connection with extensive abuse of Chesapeake’s corporate jets.
Personal use of corporate jets remains one of the most serious corporate governance issues vexing shareholders today. Providing corporate jets for business use is one thing, but providing corporate jets for personal use is another. There is no reason why corporate executives cannot fly with commercial carriers when conducting personal travel. There is simply no reason why shareholders should foot the bill for the executives’ personal travel.
At Chesapeake, however, both executives and directors for years have been allowed to use the company’s corporate planes for personal purposes. In fact, between 2007 and 2011, Chesapeake’s executives and officers incurred a total bill of nearly $14 million in personal travel, all paid for by Chesapeake’s shareholders.
As it turns out, this is just the tip of the iceberg. According to the lawsuit our firm has filed, Chesapeake’s Board is alleged to have hidden millions of additional costs of personal travel from shareholders. Furthermore, Chesapeake’s Board is alleged to have committed corporate waste in approving extravagant usage of Chesapeake’s corporate jets for personal purposes, with no discernible benefit to the company.
As a result of the Board’s breaches, Chesapeake’s shareholders are alleged to have suffered millions of dollars in damages.
For more information about this lawsuit, contact us at: email@example.com or call us on (212) 572-6434.