Will Chesapeake (CHK) Stock Be Hurt by Lawsuit?
NEW YORK (TheStreet) -- Chesapeake Energy (CHK) - Get Report and former SandRidge CEO Tom Ward are being sued by Chisholm Partners and its investors for allegedly conspiring to rig bids for drilling rights.
Chisholm says that Chesapeake and SandRidge divided the area spanning the Anadarko Basin in Kansas and other states and agreed not to compete, consequently depressing prices for the leases, Reuters reports.
The investment firm, which owned leases in Kansas, alleges that its investors lost more than $10 million from the conspiracy, which Chisholm claims ran from December 21, 2007 until at least March 31, 2012.
The plaintiffs are seeking at least $30 million in damages, according to Bloomberg.
Shares of Chesapeake are nonetheless up 0.89% to $4.54 in late-morning trading on higher oil prices. Crude oil (WTI) is rising 0.67% to $44.95 per barrel, while Brent crude is higher by 0.99% to $47.12 per barrel.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of E+.
Chesapeake's weaknesses include its generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: CHK
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.