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CHESAPEAKE ENERGY: Forshey Represents Royalty Committee Members

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In the Chapter 11 cases of Chesapeake Energy Corporation, et al., the law firm of Forshey Prostok LLP submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that it is representing the Official Committee of Royalty Owners.

On July 24, 2020, the United States Trustee for Region 7 filed a Notice of Appointment of Committee of Royalty Owners [Docket No. 488], which formed the official Royalty Committee. The Royalty Committee consists of the following nine (9) members: B.D. Griffin, Jeff G. Snowden, Ron Carlton, Daniel A. Leis, Ryan Watts, Clark A. Beebe, Michael D. Donovan, Aaron D. Hovan, and Charles E. Schaffer.

On August 10, 2020, the United States Trustee for Region 7 filed a Notice of Reconstituted Committee of Royalty Owners [Docket No. 698], which reconstituted the Royalty Committee to consist of the following seven (7) members: B.D. Griffin, Jeff G. Snowden, Ron Carlton, Daniel A. Leis, Ryan Watts, Clark A. Beebe, and Aaron D. Hovan.

As of Aug. 11, 2020, the Royalty Committee members of and their disclosable economic interests are:

B.D. Griffin
501 N. Thompson, Suite 300
Conroe, TX 77301

* B.D. Griffin currently owns 314 mineral acres located in Dimmit County, Texas and holds a claim against Chesapeake Energy Corporation pursuant to an oil and gas lease between Mr. Griffin and Chesapeake dated February 28, 2010, as amended from time to time. Currently, Mr. Griffin’s prepetition claim is no less than $1.34 million. Mr. Griffin may also possess claims against Chesapeake for certain other relief. In addition, Mr. Griffin has claims arising from post-petition production under the Griffin Lease in an undetermined amount.

Jeff G. Snowden
Capex Consulting Group
3245 Main Street, Suite 235-171
Frisco, TX 75033

* Jeff G. Snowden and his family currently owns 600 mineral acres located in Dimmit County, Texas and holds a claim against Chesapeake pursuant to an oil and gas lease between Mr. Snowden and Chesapeake dated July 9, 2010, as amended from time to time. Currently, Mr. Snowden’s prepetition claim is no less than $1.5 million. Mr. Snowden may also possess claims against Chesapeake for certain other relief, including a termination/release of acreage claim. In addition, Mr. Snowden has claims arising from post-petition production under the Snowden Lease in an undetermined amount.

Ron Carlton CTF, Ltd.
100 Cinder Road NE
Carrollton, OH 44615-9637

* Ron Carlton currently has royalty interests in more than 400 mineral acres located in Carroll County, Ohio, including more than 113 acres owned by him and his wife Judy Carlton, and more than 300 acres owned through CTF, Ltd, an entity owned by Mr. Carlton and his two brothers. Mr. and Mrs. Ron Carlton hold claims against Chesapeake pursuant to an oil and gas lease between Ronald E. Carlton and Judy L. Carlton, husband and wife, and Chesapeake Exploration, LLC dated November 28, 2011, as amended from time to time. CTF Ltd. holds claims against Chesapeake pursuant to two oil and gas leases between: (1) CTF, Ltd. by Richard A. Carlton, Member; Ronald E. Carlton, Member; and Bruce D. Carlton, Member and Ohio Buckeye Energy, LLC, dated December 9, 2010, as amended from time to time; and (2) CTF, Ltd. by Richard A. Carlton, Member; Ronald E. Carlton, Member; and Bruce D. Carlton, Member and Chesapeake Exploration, LLC, dated November 28, 2011, as amended from time to time.

In addition to the claims held by CTF, Ltd. against Chesapeake, Mr. Carlton’s brother Bruce Carlton and his wife own more than 40 mineral acres located in Carroll County, Ohio. They hold additional individual claims against Chesapeake pursuant to an oil and gas lease between Bruce D. Carlton and Catherine B. Carlton and Chesapeake Exploration, LLC, dated April 15, 2011. In addition to the claims held by CTF, Ltd. against Chesapeake, Mr. Carlton’s brother Rick Carlton and his wife own more than 12 mineral acres located in Carroll County, Ohio. They hold additional individual claims against Chesapeake pursuant to an oil and gas lease between Richard A. Carlton and Catherine A. Carlton and Chesapeake Exploration, LLC, dated November 28, 2011.

Currently, the Carltons’ and CTF, Ltd.’s prepetition claim is no less than $6.5 million. The Carltons and CTF Ltd. may also possess claims against Chesapeake for certain other relief. Finally, the Carltons and CTF, Ltd. may have claims arising from post-petition production under the leases in an undetermined amount.

Daniel A. Leis
Union Pacific Railroad Company
1400 Douglas Street, Stop 1690
Omaha, NE 68179

* Daniel A. Leis is a corporate representative of Union Pacific Railroad Company. Union Pacific currently owns approximately 1,360 mineral acres in the Barnett Shale in North Texas and holds claims against Chesapeake pursuant to 35 oil and gas leases between Union Pacific Railroad Company and Chesapeake. Union Pacific’s prepetition claim is estimated to be no less than $95,466,957.50. Union Pacific may also possess claims against Chesapeake for certain other relief. In addition, Union Pacific may have other claims arising from pre- and post-petition production under other Union Pacific Oil and Gas Leases in other basins around the United States in an undetermined amount.

Ryan Watts
Addax Minerals Fund, L.P.
5950 Berkshire Lane, Suite 1250
Dallas, TX 75225

* Ryan Watts is the corporate representative for the “Addax Group” of entities asserting claims against Chesapeake for underpayment of royalties pursuant to pursuant to over 6,000 oil and gas leases in the Barnett Shale. Currently, the Addax Group’s prepetition claim is no less than $10,000,000. The Addax Group may also possess claims against Chesapeake for certain other relief, including claims that mineral acreage subject to the Watts Lease was released by Chesapeake. In addition, Mr. Watts has claims arising from post-petition production under the Watts Lease in an undetermined amount.

Clark A. Beebe
2092 Lakeside Drive West
P.O. Box 194
Highland Lakes, NJ 07422

* Clark A. Beebe currently owns a total of 411 mineral acres located in Bradford County, Pennsylvania, including 333 acres owned by him individually, and 78 acres owned by him and his wife, Donna L. Beebe, as co-trustee of the Beebe Living Trust, dated June 26, 2010, and holds claims against Chesapeake pursuant to two oil and gas leases, one between M. Beebe individually and Chesapeake, dated February 18, 2006, and one between the Beebe Living Trust and Chesapeake, also dated February 18, 2006, both as amended from time to time. Currently, Mr. Beebe’s prepetition claim is no less than $600,000. Mr. Beebe may also possess claims against Chesapeake for certain other relief. In addition, Mr. Beebe has claims arising from post- petition production under the Beebe Lease in an
undetermined amount.

Aaron D. Hovan
154 Warren Street
P.O. Box 336
Tunkhannock, PA 18657

* Mr. Hovan currently owns approximately thirty-five (35) net mineral acres which are currently leased to Chesapeake. These acres are located in Northeast Pennsylvania, including ten (10) acres owned by Mr. Hovan, individually, and approximately twenty-five (25) net mineral acres owned but not controlled by Mr. Hovan as a non- controlling limited partner in two limited partnerships. Mr. Hovan hold claims against Chesapeake pursuant to the certain Paid Up Oil and Gas Lease dated June 28, 2008 between Lynn Zoller and Chesapeake Appalachia, LLC, as amended from time to time. Mr. Hovan purchased twenty-five percent (25%) of the Hovan Lease from Lynn Zoller on August 30th, 2013. Mr. Hovan does not control the two limited partnerships that own the other leases described above. Currently, Mr. Hovan holds a prepetition claim in an unliquidated amount. Mr. Hovan may also possess claims against Chesapeake for certain other relief. In addition, Mr. Hovan has claims arising from post-petition production under the Hovan Lease in an undetermined amount.

Mr. Hovan, and his co-counsel Ira Richards, are counsel to Lillian Sarnosky, objector in the action captioned Demchak Partners Limited Partnership v. Chesapeake Appalachia, L.L.C., No. 3:13-cv-02289-MEM (M.D. Pa.). Mrs. Sarnosky owns approximately 3 net oil and gas acres. Mrs. Sarnosky holds claims against Chesapeake pursuant to her lease with Chesapeake dated November 9, 2009. Mrs. Sarnosky holds claims against Chesapeake for underpaid royalties, wrongfully taken deductions, and for violations of mutual benefit covenant. Mrs. Sarnosky especially complains about Chesapeake’s practice of paying “negative royalties,” that is producing gas from Mrs. Sarnosky’s leasehold and not paying her any royalties for particular months. Mrs. Sarnosky’s objection seeks to protect class interests worth tens of millions of dollars.

Mr. Hovan, and his co-counsel, Ira Richards, are also counsel to the Tyler Family LP and their general partners Tim and Brian Tyler, who are putative class plaintiffs in the action against Debtor captioned Tyler v. Chesapeake Appalachia, L.L.C., 3:16-cv-00456-MEM (M.D. Pa.). The Tylers own over 400 net oil and gas acres. The Tylers hold claims against Chesapeake pursuant to their leases with Chesapeake dated January 2, 2008. The Tylers hold claims against Chesapeake for underpaid royalties, wrongfully taken deductions, and for violations of mutual benefit covenant. The Tyler’s individual claims are in excess of $1,000,0000. The claims of the putative Tyler class are worth in excess of $100,000,000.

Finally, Mr. Hovan, and his co-counsel, Ira Richards, are counsel to a group of landowners in the litigation captioned Chambers v. Chesapeake Appalachia L.L.C., 3:18-cv- 00437-ARC (M.D.Pa.). The landowners allege royalty underpayment due to wrongfully taken deductions, and violation of well-spacing claims. The claims are worth more than $1,000,000.

Mr. Hovan also represents multiple royalty owners and landowners with ongoing business with various debtors. These matters include real estate sales, lease negotiations, and other matters involving Chesapeake as part of the general ongoing business of the Debtors.

Proposed Counsel for the Official Committee of Royalty Owners can be reached at:

J. Robert Forshey, Esq.
Jeff P. Prostok, Esq.
Suzanne K. Rosen, Esq.
FORSHEY PROSTOK LLP
777 Main St., Suite 1550
Fort Worth, TX 76102
Telephone: (817) 877-8855
Facsimile: (817) 877-4151
Email: bforshey@forsheyprostok.com
jprostok@forsheyprostok.com
srosen@forsheyprostok.com

– and –

Deirdre C. Brown, Esq.
FORSHEY PROSTOK, LLP
1990 Post Oak Blvd., Suite 2400
Houston, TX 77056
Telephone: (832) 536-6910
Facsimile: (832) 310-1172
Email: dbrown@forsheyprostok.com

A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://is.gd/YvmtV4.

About Chesapeake Energy

Headquartered in Oklahoma City, Chesapeake Energy Corporation’s (NYSE: CHK) operations are focused on discovering and developing its large and geographically diverse resource base of unconventional oil and natural gas assets onshore in the United States.

Chesapeake Energy reported a net loss of $308 million for the year ended Dec. 31, 2019. As of Dec. 31, 2019, the company had $16.19 billion in total assets, $2.39 billion in total current liabilities, $9.40 billion in total long-term liabilities, and $4.40 billion in total equity.

Chesapeake Energy and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after reaching terms of a Chapter 11 plan of reorganization to eliminate approximately $7 billion of debt.

The Debtors tapped Kirkland & Ellis LLP as legal counsel; Alvarez & Marsal as restructuring advisor; Rothschild & Co and Intrepid Financial Partners as financial advisors; and Reevemark as communications advisor. Epiq Global is the claims agent, maintaining the page http://www.chk.com/restructuring-information.

Wachtell, Lipton, Rosen & Katz serves as legal counsel to Chesapeake Energy’s Board of Directors.

MUFG Union Bank, N.A., the DIP facility agent and exit facilities agent, has tapped Sidley Austin LLP as legal counsel; RPA Advisors, LLC as financial advisor; and Houlihan Lokey Capital, Inc. as investment banker.

Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. serve as legal counsel to an ad hoc group of first lien last out term loan lenders while Perella Weinberg Partners and Tudor, Pickering, Holt & Co. serve as the group’s investment bankers.

Franklin Advisers, Inc., has tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel; FTI Consulting, Inc. as financial advisor; and Moelis & Company LLC as investment banker.

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