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Energy company pleads not guilty in Michigan court

Chesapeake Energy Corp. has been accused of lying to Michigan landowners while in the process of leasing out various properties. This new accusation comes after some antitrust claims that relate to bids made in Michigan over gas exploration rights. The company has now pleaded not guilty to the accusations of lying in a court in Cheboygan, Michigan.

The charges against the company are for both fraud and racketeering.

According to the prosecution, the company was involved in a bidding competition to lease out properties in Michigan, and they lied to the people that owned those properties. Allegedly, they told the property owners that it would be fine to lease out the properties, even if those properties had already been mortgaged. When the competition dried up, the gas provider then turned around and cancelled a lot of those leases. The reason that they used was that many of them were under mortgage, going directly against what they had said previously.

The other accusations that have been brought against the company in Michigan were for collusion. Claims were made that they and Encana Corp., a company out of Calgary, had worked together to split up Michigan counties in order to make the prices lower when bidding for gas exploration rights.

There is only one natural gas supply company in the United States that is bigger than Chesapeake.

When facing business litigation of this type, it is important for the owner of any company to know both how their actions fit within the current laws and what rights they have to fight the charges if they so choose. The cases can grow complex, especially when they involve multiple states and corporations from other countries.

Source:  Businessweek, "Chesapeake Pleads Not Guilty in Michigan Racketeering Lease Case" Andrew Harris, Jun. 25, 2014

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