The U.S. Supreme Court rejected Chesapeake Energy Corporation’s petition for certiorari on Monday, forcing the company to pay nearly $439 million to investors following a bonds dispute, according to a report by The Oklahoman.
The Oklahoma City-based company filed an appeal with the high court on February 2. Chesapeake sought a review of a September 2016 Second Circuit decision upholding the judgment over a bond issuance. In the underlying case, the court ruled that Chesapeake must pay the $439 million judgment to the Bank of New York Mellon Trust Corp.
“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,” said Gordon Pennoyer, Chesapeake spokesman, in a statement.
On February 13, OK Energy Today reported that BNY Mellon argued Chesapeake waited too long to tell bondholders of its plan to redeem $1.3 billion of the debt six years early. BNY Mellon claimed hedge funds and other holders of Chesapeake’s 6.775 percent notes maturing in 2019 were contractually entitled to a special make-whole price because of the early redemption.
The three-judge appeals court panel sided with BNY Mellon, holding the payout was justified.
The case is styled Chesapeake Energy Corp. v. Bank of New York Mellon Trust Co. NA, case number 16-972, filed in the U.S. Supreme Court.