A Chesapeake Energy shareholder claims in a lawsuit that the company has vastly understated how much executives and directors use corporate jets for personal travel by as much as $10 million per year.
Virginia resident Gilberta Norris filed the derivative shareholder lawsuit in Oklahoma County District Court on Tuesday, claiming that Chesapeake executives and directors have been using the company's fractionally owned aircraft for personal trips to the tune of millions more than what was reported for the past five years.
Between 2007 and 2011, Chesapeake executives and directors reported to shareholders at least $13.8 million in personal aircraft usage.
However, Chesapeake has reported only the variable costs of executives' and directors' personal aircraft usage and not any fixed costs, Norris claims in her lawsuit.
"Thus, for years, shareholders have been kept in the dark as to the size of these fixed costs, and the true, aggregate cost of Chesapeake's aircraft," the lawsuit claimed.
Fixed costs of the aircraft include a monthly management fee for things such as pilot salaries, training, hangar costs, maintenance expenditures and insurance, among other things, the lawsuit claims.
The information from the lawsuit came from a shareholder demand to inspect company records, which is permitted in certain cases under Oklahoma law, said New York City-based attorney Hung G. Ta, who is representing Norris in the lawsuit.
Portions of the lawsuit with details of how certain travel costs have been omitted from the company's official reports have been redacted because of a confidentiality agreement Norris made with the company as part of her demand to inspect company records.
Ta and his clients are considering …