Court Rules Chesapeake Energy Must Settle Dispute with Old CEO in Arbitration -- Update

By Erin Ailworth 

After accusing its former chief executive of stealing trade secrets, Chesapeake Energy Corp. must try to settle its dispute with the old CEO's new company through arbitration, according to a district court judge in Oklahoma.

Chesapeake sued American Energy Partners LP and several of its affiliates in mid-February. Chesapeake contends that the rival company was built by Chesapeake co-founder and former chief, Aubrey McClendon, using confidential data and maps of oil and gas prospects taken shortly before Mr. McClendon's ouster from Chesapeake in 2013.

Though Mr. McClendon isn't named in the suit, American Energy argued that under the terms of Mr. McClendon's separation agreement with Chesapeake, the case should be settled via arbitration.

"Chesapeake cannot escape its contractual commitment to arbitrate through the procedural gimmick of leaving Mr. McClendon's name off" the lawsuit, American Energy said in court filing requesting arbitration.

Oklahoma County District Court Judge Thomas Prince agreed to the request at the end of April, a court docket shows. It isn't clear when arbitration begins.

In a Friday filing with the U.S. Securities and Exchange Commission, American Energy said it believes the judge's decision has put an end to Chesapeake's lawsuit.

A representative for Chesapeake declined to comment. American Energy couldn't be reached for comment.

Write to Erin Ailworth at [e-mail]

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