U.S. Supreme Court won’t consider Chesapeake Energy’s appeal request

Chesapeake Energy Corp. must pay nearly $439 million to some investors after the U.S. Supreme Court on Monday rejected the company’s request for appeal.

The court without comment denied the Oklahoma Citybased oil and natural gas producer’s petition.

“While we are disappointed the Supreme Court would not hear the appeal, this potential result had already been reflected in our previous financial statements and will have no impact on liquidity,” Chesapeake spokesman Gordon Pennoyer said in a statement Monday.

The court noted its newest member — Justice Neil Gorsuch — was not involved in the consideration or decision of the petition.

By refusing to hear the case, the Supreme Court left in place the September 2016 decision by the U.S. Court of Appeals for the Second Circuit that Chesapeake must pay bondholders for improperly redeeming a bond issue in 2012.

The case has bounced around federal courts since it was filed in 2013. Chesapeake initially won, but that was appealed to the U.S. Court of Appeals for the Second Circuit, which reversed the judgment and sent it back to federal district court. That court in July 2015 ruled against Chesapeake in a decision upheld by the appellate court decision.

The senior notes due in 2019 had an interest rate of 6.775 percent. They also had a special provision allowing Chesapeake to redeem them early at face value, plus interest, without paying the full value of the interest accruing over seven years.

At issue was how the parties interpreted the deadline for notice of early redemption of the 2019 notes. Chesapeake said it had until March 15, 2013, but attorneys for The Bank of New York Mellon Trust Co. said the deadline was in mid-February that year.

Chesapeake shares closed down 14 cents, or 2.5 percent, to $5.38 on the New York Stock Exchange on Monday.