Michigan charges mount against Chesapeake

Charges: Chesapeake in Michigan legal battle

Michigan’s attorney general has added another 12 charges in his case against the leasing practices of Chesapeake Energy, bringing the total number of counts filed against the US shale giant to 24.

Attorney general Bill Schuette slapped Chesapeake with 12 more counts of "false pretenses" after speaking with additional landowners who claim they were wronged by Chesapeake’s decision not to accept their leases.

Schuette alleges that Chesapeake canceled the leases due to existing mortgages on the property, even though landowners were assured such mortgages would not disqualify their lease.

"Chesapeake therefore obtained uncompensated land options from these landowners by false pretenses, and prevented competitors from leasing the land," the state said.

Click here to see a copy of the compalaint.

Chesapeake already faces eight counts of false pretenses and a felony count of conducting a criminal enterprise in relation to the case.

The charge of conducting a criminal enterprise carries a maximum sentence of $100,000 and the false pretense charges carry fines of up to $10,000 or three times the value of the property involved, whichever is greater.

The case is due for a preliminary examination in court on 18 August.

In addition, Chesapeake still faces three counts related to an anti-trust case brought by Schuette against Chesapeake and Canadian giant Encana.

In that case, Schuette alleges that Chesapeake and Encana agreed not to compete in certain areas in order to suppress the price they needed to pay to secure oil and gas leases.

Earlier this year, Encana pled no contest to a single count of conspiracy to commit anti-trust violations and paid a $5 million settlement.

Chesapeake has plead not guilty to all counts and has repeatedly said the case is without merit.

A Chesapeake spokesman said: "We believe this action has no merit and we will vigorously contest these baseless allegations."

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