Chesapeake settlement letters are in the mail

Letters explaining the $52.5 million settlement of more than 400 lawsuits go out in the mail.
Letters explaining the $52.5 million settlement of more than 400 lawsuits go out in the mail. Star-Telegram archives

The letter’s in the mail.

Angry landowners accusing Chesapeake Energy of cheating them out of millions of dollars in royalty payments have started receiving letters from the McDonald and Circelli, Walter & Young law firms explaining the global settlement offer that was reached last month.

Part of the letter gives a generic explanation of the $52.5 million deal reached with Chesapeake and Total E&P USA Inc., Chesapeake’s partner in the Barnett Shale. The back portion of the letter gets into specifics of how each landowner would get paid, minus attorneys fees.

There’s also a consent form on the back page where the client can decide whether or not to accept the deal hammered out by the law firms and Chesapeake’s corporate attorneys. Ninety percent of the 13,000 clients — and leaseholders that account for at least 95 percent of the natural gas pumped out of the ground since May 2011 — must give their stamp of approval by July 11.

Dan McDonald, the attorney who started the mass litigation against Chesapeake, said about half the letters were mailed Tuesday and the rest the next day. He said the firm has a phone line set up that can handle 100 calls at a time; by 8:30 a.m. Thursday, about 80 people were already on the line.

They’ve also set up a phone line with a recorded message of McDonald explaining the deal.

“It has been overwhelmingly positive and I’m optimistic about the response,” McDonald said. “We’ve tried to do our level best to give our clients as much information as we can.”

The potential deal, even before being approved, already is having an impact.

First of all, the next three trials have been delayed — one was supposed to start on Monday — because of the proposed settlement. Now, if the deal is rejected and there still is a trial, it won’t be until September. Trials had been scheduled for each month stretching all the way to January.

“There will be no trials this summer,” George Parker Young said.

Also, if you have a Chesapeake lease, saw that $52.5 million headline and thought, ‘How do I get some of that?’ don’t call McDonald’s or Young’s firms. They aren’t accepting any new clients in regards to Chesapeake in the Barnett Shale, at least for the moment.

“We’re not taking more clients. We have moved on,” Young said.

Max B. Baker: 817-390-7714, @MaxbakerBB