WV couple claims Chesapeake debt counted as property lien - WBOY - Clarksburg, Morgantown: News, Sports, Weather

WV couple claims Chesapeake debt counted as property lien

Posted: Updated:
  • LawMore>>

  • Lena Lunsford arrested in connection with her toddler Aliayah's 2011 disappearance

    Lena Lunsford arrested in connection with her toddler Aliayah's 2011 disappearance

    Thursday, November 3 2016 3:25 PM EDT2016-11-03 19:25:13 GMT

    Lena Lunsford was taken into custody by authorities in Pinellas County, Fla., where she is awaiting extradition on a charge of death of a child by a parent by child abuse,  Lewis County, WV, Sheriff Adam Gissy told The Exponent Telegram.

    Lena Lunsford was taken into custody by authorities in Pinellas County, Fla., where she is awaiting extradition on a charge of death of a child by a parent by child abuse,  Lewis County, WV, Sheriff Adam Gissy told The Exponent Telegram.

  • Greenbrier County, WV, business owner admits pocketing money intended to pay employment taxes

    Greenbrier County, WV, business owner admits pocketing money intended to pay employment taxes

    Thursday, November 3 2016 1:59 PM EDT2016-11-03 17:59:28 GMT
    CHLOE DAWSON/ The State JournalCHLOE DAWSON/ The State Journal

    Brandon J. Black, 32, of Rainelle, WV, owned and operated a private security business in Lewisburg that provided services to businesses and individuals throughout West Virginia.

    Brandon J. Black, 32, of Rainelle, WV, owned and operated a private security business in Lewisburg that provided services to businesses and individuals throughout West Virginia.

  • Inmate at federal prison in Glenville, WV, admits assaulting CO

    Inmate at federal prison in Glenville, WV, admits assaulting CO

    Wednesday, September 28 2016 9:53 AM EDT2016-09-28 13:53:20 GMT
    CHLOE DAWSON/ The State JournalCHLOE DAWSON/ The State Journal

    U.S. Attorney William J. Ihlenfeld II said Robert Fleming, 30, intended to harm the correctional officer in the June 2014 assault.

    U.S. Attorney William J. Ihlenfeld II said Robert Fleming, 30, intended to harm the correctional officer in the June 2014 assault.

A Hancock County couple whose mineral rights were used without their knowledge as collateral for a $500 million loan have filed suit against Chesapeake Energy affiliates, claiming Chesapeake’s debt was improperly recorded as a lien against their property.

Homeowners John and Jacqueline Bird of New Manchester filed the suit in Hancock County Circuit Court, saying the enormous lien has imperiled their ability as property owners to buy, sell or borrow against their property, “thereby depreciating its market value, restricting plaintiffs’ full use and enjoyment of the property, and hindering plaintiffs’ rights ... .”

Suit details

The suit, which seeks class action status, also claims the landsman who arranged the deal, Chris Turner, prepared, explained and modified legal documents, including leases, even though he was not an attorney.

The Birds want both the lease and the deed of trust against affected properties voided.

The suit, filed by Raymond A. Hinerman of Hinerman & Associates and Vince Gurrera of Gurrera Law Offices, both of Weirton, also seeks damages and costs from three Chesapeake affiliates — Chesapeake Exploration, Chesapeake Appalachia, Chesapeake Utica; Kenyon Energy, which procures mineral rights for the Chesapeake companies; Deutsch Bank and its West Virginia trustee, attorney P. Nathan Bowles; and Chris Turner, a landsman working for Kenyon and Chesapeake.

Chesapeake has petitioned to move the case to U.S. District Court.

Planning to pool

The suit claims Turner approached the Birds in 2010 for the mineral rights to their 3.4-acre property, but the couple declined. Turner left his business card, however, and after hearing that other property owners were signing up Jacqueline Bird called him, and Turner appeared at their home the following day with a pre-printed lease. Turner answered questions about delayed payments, royalties, lease terms, machinery storage and drilling locations.

The Birds say Turner told them “the plan was to pool various holdings in the vicinity and to develop that unit by drilling elsewhere.”

“Turner specifically explained that without signing the document as presented, plaintiffs would receive no royalties while their neighbors would enjoy the benefits of their agreements as members of the unit,” the suit complains.

Based on Turner’s characterization of the situation, the Birds say they signed the five-year lease. The agreement promised them a $1,250 per acre bonus and 15 percent royalty, with an option for the energy company to extend it an additional five years. The $4,250 check they received, however, did not reflect the correct amount.

The suit claims the document, characterized as a lease by Chesapeake Appalachia, was not signed by them or any of their assignees. It also points out that both the bonus check the Birds received and a delayed rental payment they received several months later were incorrectly calculated.

The Birds say they found out about the lien when they applied for a loan from a local bank. They intended to use their property as security only to find Deutsch had put the $500 million lien on it.

Creating a cloud

The lien “has created a cloud on the title of the plaintiff’s property so as to cause lenders and title searchers to determine that (it) is insufficient collateral for lending and title insurance purposes, resulting in diminished land value; the inability to market and sell the property with covenants of general warranty; aggravation, inconvenience, mental anguish, sorrow and humiliation,” the suit stated.

Hinerman said the Birds signed “what they thought were leases, though there’s a question (now) whether it was a lease or an option. They signed it because they hoped to get some royalties.”

“What they didn’t know or understand because it was never told to them was that their lease would become collateral for a $500 million loan, that there would be a lien on the property of every person who is in the class.”

As many as 500 property owners might be impacted, although that number could go up or down.

The lien wasn’t discovered until Bird and his wife approached the bank for a loan.

“In the purest sense, without the lien being released ... they can’t borrow money, they can’t sell it,” the suit reads.

The suit suggests the liens protecting Chesapeake’s debt were inappropriately placed against the individual property owners, putting their property and interests at risk in the event Chesapeake didn’t live up to its obligations.

The complaint alleges Turner, in his capacity as an agent for Kenyon and Chesapeake, “failed to properly inform” the Birds and other property owners exactly what they were signing, what they would be paid, and how the transaction could result Deutsch attaching a lien to their property as collateral for Chesapeake’s loan “so as to prevent the plaintiffs from securing loans, selling their property with good and marketable title, and exposing part of their realty to foreclosure in the event (Chesapeake) defaults on a $500 million loan.”

It accuses the energy companies, Deutsch Bank, Turner and Bowles of intentional misrepresentation and fraud, claiming the Birds had no idea when they signed “of the falsity of the defendants’ scheme or misrepresentations.”

“The defendants paid a pittance for (their) claimed ability to develop minerals, but actually used (those) rights as security for a monstrous, $500 million loan for which the plaintiffs’ realty is now answerable,” the suit stated.

The Birds want a court order voiding Deutsch Bank’s deed of trust, which gives Bowles the right to foreclose on the Bird property if Chesapeake defaults.

 

Powered by Frankly