Chesapeake Energy Corp. was rejected again in its bid to avoid paying investors in a bond dispute after the U.S. Court of Appeals for the Second Circuit held for the plaintiff. In a 3-0 ruling the circuit court said the $438.7 million payout, which includes a make-whole payment of $380 million and interest, was justified because Chesapeake waited too long to tell bondholders about a plan to redeem $1.3B of of debt six years early [Chesapeake Energy Corp. v. Bank of New York Mellon Trust Co. NA, No. 15-2366-cv]. The company in February 2012 issued senior notes due on March 15, 2019. On February 20, 2013 Chesapeake said it would redeem the notes, but the Bank of New York Mellon Corp. sued, claiming the time to give notice of redemption at the special price had expired. Under terms of the agreement, Chesapeake had to give 30 days notice, which ended March 15, 2013, less than 30 days before it planned to redeem the bonds. The U.S. District Court for the Southern District of New York in 2015 had ruled for the bank (see Shale Daily, July 10, 2015).
Range Resources Corp. said Thursday that its stockholders voted to approve the company's acquisition of Houston-based Memorial Resource Development Corp. (MRD). Range said 99.3% of those who voted were in favor of issuing more common stock to acquire the company. MRD stockholders also approved the merger, with 98% of those who voted voting in favor. Range said in May it would acquire Louisiana player MRD in an all-stock deal worth $4.4 billion (see Shale Daily, May 16). The transaction is expected to close on Friday.