A 2015 court decision ordering Chesapeake Energy Corp. to pay more than $400 million in a bond dispute is officially in full effect after the U.S. Supreme Court declined to hear the company's appeal this week.
The high court sent notice that it is denying Chesapeake's Feb. 2 petition seeking a judgment in its case against the Bank of New York Mellon Corp., which centered around a bond dispute dating back to Chesapeake's time under late co-founder Aubrey McClendon.
The dispute hinged on whether Chesapeake owed lenders an additional $438 million -- a $380 million "make-whole" payment plus interest -- on $1.3 billion in bonds issued beginning in 2012 after it redeemed those bonds past a contractual deadline for early redemption.
Chesapeake missed a March 15, 2013, deadline to redeem the bonds early, providing notice of its plans to redeem before the deadline but not 30 days in advance as stipulated under the contract, according to court filings.
The bank sued, and U.S. District Judge Paul Engelmayer of the Southern District of New York in Manhattan ruled against Chesapeake, ordering the make-whole payment to bondholders. Chesapeake appealed, but the U.S. Court of Appeals for the Second Circuit upheld Engelmayer's 2015 decision in a ruling last September