Chesapeake Energy Hires New General Counsel as it Faces Legal Issues
09/21/2012| 03:29pm US/Eastern
By Alison Sider
Chesapeake Energy Corp. (>> Chesapeake Energy Corporation) announced Friday it has appointed Oklahoma lawyer James Webb as its general counsel, as the company faces legal challenges from angry shareholders as well as an inquiry by the Justice Department.
Mr. Webb has served as chief legal counsel on a contract basis for the last four months. He succeeds Henry Hood, who has served as Chesapeake's senior vice president--land and legal since 1997. Mr. Hood will continue to oversee the company's land and regulatory departments.
The move comes as Chesapeake faces several legal challenges. Last month, Chesapeake disclosed the U.S. Department of Justice is investigating whether Chesapeake colluded with rival Encana Corp. (ECA, ECA.T) while bidding for oil and gas leases in Michigan. The company also said state governmental agencies have requested documents relating to other investigations of its oil and gas leases. And a suit brought by shareholders in U.S. District Court last spring alleged Chief Executive Aubrey McClendon's use of Chesapeake wells as collateral for loans presented a conflict of interest.
Phil Weiss, an analyst with Argus Research, said Mr. Hood was a visible figure as questions were being raised about Mr. McClendon's borrowing practices. Mr. Hood said in April the suggestion that the practices raised a conflict of interest was "unfounded."
"It seems to me they certainly pared back his responsibilities," Mr. Weiss said, adding he felt some of Mr. Hood's comments seemed "somewhat dismissive."
"Maybe a change of face is needed in light of what happened," he said.
Chesapeake shares were trading down 1% at $19.30 Friday afternoon.
Write to Alison Sider at email@example.com
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