County royalty owners arm themselves for war
http://m.cleburnetimesreview.com/news/article_0111ca50-2ebe-11e4-b9...
The David and Goliath war by Johnson County land owners against Chesapeake Energy may well have gained a pair of new troops on Tuesday.
Albert and Vertis Gibbs, who are Chesapeake royalty owners, attended a Cleburne Conference Center presentation by the lawyer who is suing Chesapeake on behalf of about 3,000 area royalty owners.
“The big dogs started something,” Albert Gibbs said. “Now the little guy’s getting involved.”
About 60 lessors were on hand for the latest in the ongoing series of talks, designed to inform them of the issues, by Fort Worth attorney Dan McDonald.
“They have stolen hundreds of millions of dollars,” from Johnson and Tarrant County royalty owners who leased land to Chesapeake, McDonald said. “There is only one word to describe what they’ve done: stealing.”
McDonald is enlisting an army of plaintiffs who might not otherwise be able to hire a litigator; their individual claims are relatively small, and their potential judgments insignificant to Chesapeake....
However, a few new details emerged at the local meeting.
McDonald told the Cleburne crowd that District Judge William Bosworth will be handling the cases he’s filing here.
“They’re all consolidated,” McDonald said. “Judge Bill Bosworth is going to be the Chesapeake judge.”
Bosworth presides over the 413th District Court in Cleburne.
“Judge Bosworth is an excellent judge,” McDonald said. “I couldn’t be happier.”
McDonald, who has put together a sophisticated media campaign that includes a website devoted to the Chesapeake cases as well as billboards and a weekly 6 p.m. Wednesday royalty owners’ teleconference, told the crowd he’s hired an accountant with years of experience in the oil and gas industry to analyze clients’ royalty checks.
On the conference center wall McDonald presented a table of one royalty owner’s payments from Chesapeake and other operators over four years. According to the graphic, underpayments ranged from an average of 54 cents per 1,000 cubic feet of natural gas in April 2011 to $1.88 per 1,000 cubic feet in May 2011.
In September, Chesapeake and McDonald are set to have a hearing on the motion to begin trying the Johnson County cases next spring, but ultimately McDonald said he expects Chesapeake to settle.
The Fort Worth Star-Telegram last week reported that Chesapeake agreed to pay the city of Arlington $700,000 after officials there sued, alleging that the company did the same thing McDonald is charging it did to land owners here: deducted post-production costs it was not entitled to.
“Under the agreement, Chesapeake will no longer subtract post-production costs and the city’s royalty will be calculated based on the highest price received by Chesapeake when the gas is sold or the price established by a formula,” the Star-Telegram reported. “Arlington’s deal mirrors one that Chesapeake reached with Dallas/Fort Worth Airport in 2012 for $5 million. That deal also established a formula for royalty payments.
“Chesapeake also quietly settled with the Tarrant Regional Water District earlier this year when it agreed to pay the district $1.8 million for royalties on 100 leases from January 2008 through October 2011.”
McDonald’s firm is gearing up to handle the cases.
“We have added four lawyers and six new legal assistants to work on our Chesapeake litigation and we need much more space,” McDonald wrote in an email. “We have over 3,000 Chesapeake royalty owner clients. We expect to have at least 10,000 by the end of the year.”
Barbara Smith owns two acres of land at Bowman Springs Road in Arlington. Chesapeake has a lease on one acre and another company leases drills on the other.
She only recently heard about the lawsuits, but she’s going to send McDonald her Chesapeake paperwork.
“Chesapeake is paying me less than half what Vantage is paying for the same land,” she said. “I kept calling and they won’t do anything.”
Chesapeake declined to comment.
Taking aim on Chesapeake royalty underpayment
Views: 13754
Replies to This Discussion
-
Permalink Reply by Linda Whatley on
-
Sounds good to me!!!....
-
Permalink Reply by HBP on -
I wish them luck with the strategy. Not everyone can afford a great attorney, experts and all of the other costs to bring these to trial, so you will have contingency fee guys (and gals) who will take a shot that way. But they are going to have to individually file these cases, then maybe they get allowed to be grouped by unit. They would need a large number of cases to have the bargaining power they suggest those cases would bring, and to manage that against CHK is not easy, quick or profitable.
I also think even if they could score a settlement, CHK is not going to include attorney fees, or penalties. They would rather pay their attorneys to fight it.
I'm sure we'll hear updates or be able to follow it in the system, so I'll wait and see for further developments.
-
Permalink Reply by Henry on -
Here are my notes from tonight's teleconference on 10/1/2014. Much of the info was a repeat of prior teleconferences, and since I've posted those notes already, I won't repeat them here.
The speaker on the telecon was Dan McDonald, the lead attorney on this effort. The guy is out for CHK. He says, "Aubrey McClendon is a crook, folks."
He estimates that the amount of overcharges in TX alone could be $1B. (Holy contingency fee, Batman!)
They have 5000 clients signed up and hope to have 10,000 by the end of the year. They have filed 40 law suits in TX so far, in multiple counties. The first goes to trial in May 2015. He said they hope to soon file their first case in LA.
The McDonald Law Firm has 6 lawyers. They have added 3 other firms in TX, 1 firm in LA, and 1 firm in PA to help. Mr. McDonald did not name the firms. They also have a staff of 30 to run this.
henry here.... That's about all the new stuff I learned. I did call the firm and spoke with one of the legal assistants. It was interesting that they view this as a "mass tort" case, and that is what they are experienced at. MLF is not a firm that specializes in oil and gas. I couldn't decide if this was good, bad, or neither... just a different perspective.
-
Permalink Reply by Henry on
-
Here are my notes from teleconference of Wednesday, October 8, 2014.
Nothing really new to report. Dan McDonald was the speaker. He said they are signing up 500 - 600 new clients every week.
-
Permalink Reply by Henry on
-
I listened in on the telecon tonight, 10/29/2014.... Nothing really new. They now have 40 law suits filed. First trial is in Texas, in May 2015. They are on track to have 10,000 plaintiffs signed up by the end of the year. Mr. McDonald wants "every single CHK royalty owner in America" to sign up -- he has no problem with someone who has a tiny acreage.
-
Permalink Reply by Skip Peel - Mineral Consultant on
-
Thanks for the update, Henry. If you can find out, please post when and where Mr. McDonald files his first Louisiana suit.
-
Permalink Reply by Henry on
-
I listened in on the telecon tonight -- 11/26/2014. Here's what is new.
McDonald has gone to Oklahoma City and has begun depositions at CHK. They found that when CHK sold properties to Total, Total was uncomfortable with CHK's methods of paying royalty owners and Total pressured CHK to change its billing/payment methods.
They also, based upon the discovery process,confirmed that CHK's billings for transportation and marketing were as much as 10X that of other comparable firms, e.g., XTO, EOG.
In the depositions, no one from CHK would claim that the excess charges were legal. No one at CHK has denied that they were cheating people.
First case is set for trial on June 15. They are filing about 10 lawsuits/week and plan to for the next year.
-
Permalink Reply by booger on
-
Henry - any more updates?.....this is a very interesting thread.
thanks
-
Permalink Reply by Henry on
-
My bad. I'll try to get on the conference call tomorrow night and report back. I have learned that they have between 1500 and 2000 clients in Louisiana, but have not yet filed the first Louisiana suit. They plan to file fairly soon.
-
Permalink Reply by Two Dogs, Pirate on
-
I spoke with a fellow in Red River Parish about a month ago and he told me that CHK had just paid him for all the back money they screwed him out of.
-
Permalink Reply by Tom Graves on
-
I'm curious if CHK continues to send monthly royalty checks or do they place payments in suspense once the McDonald firm files suit?
Support GoHaynesvilleShale.com
Top Content
Not a member? Get our email.
Groups
-
San Augustine, TX
386 members
-
Rusk County
97 members
-
Vernon Parish
59 members
-
Natchitoches Parish
399 members
-
Bienville Parish, LA
242 members
-
Sabine County, Texas
172 members
-
Sabine Parish, LA
455 members
-
Cass County, TX
118 members
-
Angelina County, TX
87 members
-
Titus County
10 members
© 2024 Created by Keith Mauck (Site Publisher).
Powered by
