April 18: Reuters reports Chesapeake Energy Corp. Chairman and CEO Aubrey McClendon has taken out up to $1.1 billion in personal loans against his stake in a perk called the Founder Well Participation Program. The perk allows him to invest up to 2.5 percent in each well drilled by the company, although he must pay his share of the upfront drilling costs. Shares fell 5 percent on news of the personal loans.
April 20: The first of several shareholder lawsuits is filed against Chesapeake, its board and McClendon. The lawsuit claimed inadequate disclosures on McClendon's loans against his stake in the well program and potential conflicts of interest because his lenders also did business with the company. Chesapeake files a preliminary proxy statement with the Securities and Exchange Commission providing some additional details on the founder well program.
April 26: Chesapeake and McClendon agree to end the founder well program before its expiration in 2015. The company's board said it will review McClendon's financing transactions with third parties that also had a business relationship with Chesapeake. McClendon sends out a separate disclosure statement saying he has been borrowing money to cover his share of costs in the company's drilling program since 1993. McClendon and his affiliated companies owed $846 million under the program. The estimated value of the production from the wells was worth $852 million as of Dec. 31, he said. Reuters, citing an unidentified source, said the SEC has opened an “informal inquiry” into the founder well program.
May 1: McClendon agrees to relinquish his position as Chesapeake's chairman but will remain on the board and continue to serve as CEO. The company said it will look for a nonexecutive chairman who doesn't have a previous relationship with Chesapeake. The company also said it would end the founder well program by June 2014 and McClendon would not receive any compensation in the termination of the program.