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Chesapeake Ordered to Pay Up

by Elizabeth Alford on December 16, 2015

It’s pay-up time for Chesapeake in a long awaited court fight over lease payments.

Related:  Chesapeake Royalty Case Gains Support from Landowner Groups

Hundreds of Northern Michigan residents have been waiting since 2010 for Chesapeake to make good on the leases they signed and, five years later, they may finally get paid.

During the summer of 2010, Chesapeake competed against Encana Oil & Gas for oil and gas leases in northern Michigan counties. The competition became stiff and drove up the price of those leases. Many residents who eventually signed with Chesapeake claim they were never paid.

In April, the Michigan Attorney General reached an agreement with Chesapeake that included setting up a $25 million fund to pay residents who say they were defrauded by the company. According to attorneys, the company never paid that amount but sent letters informing landowners the leases were void. Encana and Chesapeake were also accused of conspiring to keep lease prices low during an auction of mineral rights for public lands in 2010 by agreeing not to bid against each other. On these charges, Chesapeake paid $5 million to split between the Department of Natural Resources and the state’s antitrust enforcement arm, while Encana settled with the state for $5 million in 2014.

Lease holders have been forced to sue to get the money they were promised and awarded. Susan Hlywa Topp, a Gaylord-based attorney has represented more than 300 clients who settled civil cases against Chesapeake.

Defrauded residents have until February 25 2016 to file a claim against Chesapeake with the Attorney General’s office.

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