In the request to delay the annual meeting, shareholders want Chesapeake to update its proxy, which was filed May 11.
“The relief sought herein requires the board to supplement the 2012 proxy by fully detailing the existence, extent, and terms of McClendon's FWPP financing schemes and the identities of his creditors,” according to the motion. “The disclosures must be full and complete to allow shareholders to understand the nature of the conflict; the parties involved; the manner in which the conflict has affected the company in the past; and how it may affect the company in the future.
“In light of the board's statement that it is ‘fully aware' of the schemes, it cannot argue that such a disclosure would be burdensome.”
Attorneys for the shareholders contend what has happened over the past month justifies their request for additional disclosures by Chesapeake.
“It is clear from the procession of revelations since April 18, 2012 concerning the extent of McClendon's Byzantine financing arrangements, and the corresponding decrease of Chesapeake's share price, that McClendon's schemes should have been fully disclosed,” the motion states. “Thus, the shareholders must know the details of the schemes in order to evaluate the sufficiency of Davidson's and Hargis's discharge of their fiduciary duties.”
Chesapeake's stock has dipped more than 26 percent since the initial report of McClendon's personal loans less than a month ago. That has shaved more than $3.3 billion off the company's market value.
The stock closed Wednesday at $14.04, down an additional 4 percent to its lowest point in the last year.