A Michigan state judge, in the Cheboygan District Court, ruled on Monday that the Oklahoma-based natural gas and oil company must stand trial on one count of racketeering and 20 counts of using false pretenses to defraud private landowners during a 2010 oil and gas leasing spike, Reuters added.
In June, Michigan state Attorney General Bill Schuette brought the allegations against Chesapeake, claiming the company pulled out of deals citing the property's mortgage as an issue after telling clients it would not be a problem.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
The state is charging Chesapeake with obtaining "uncompensated land options from these landowners by false pretenses, and prevented competitors from leasing the land," Reuters noted.
In a statement to Reuters, the company said the allegations have no merit and that it expects to come out victorious in court. A trial date has not been set.
Shares of Chesapeake Energy are down by 0.66% to $25.41 in late afternoon trading on Tuesday.
Separately, TheStreet Ratings team rates CHESAPEAKE ENERGY CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHESAPEAKE ENERGY CORP (CHK) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins."