Kirkland and Ellis is charging around 3 million a month for legal services, with average hourly rates of $1,007.45. Their bill just for August was over 3 million and they get 80% of their bill paid once a month before the bankruptcy is completed. Look at document 1811.
There are a large number of other lawyers filing similar bills. This is pigs at the trough writ large.
Leadbelly was right when he said you can rob a man easier with a fountain pen than you can with a 6-gun.
Nobody should be in the dark on any of this. You can Google PACER, sign up for an account for free and read and copy any instrument of record. The cost is ten cents a page, but the cost of any document is capped at three dollars. Consequently you can read and copy the re-org plan, which is over a thousand pages long for 3 dollars.
Let’s shine a light on these c—roaches—get em running.
21 replies (most recent on top)
Don’t forget the Jackson Walker law firm is probably charging as much or more than Kirkland. Rothchild & Co just turned in a 3.3-million-dollar bill for 90 days of investment banking work advising the dirtbag lawyers (that’s about 40 grand a day seven days a week.) Let’s face it, CHK is and always has been a money/orgasm machine (like something out of a Woody Allen movie) for both fringe players and insiders and the insiders’ friends, who happen to be the fountainhead for all the bad ideas that bankrupted us.
I don’t want to know the total amount wasted—that number is too depressing to even think about. I busted my backside so that a bunch of low lifes could earn fees that would make robber barons blush. That alone is depressing enough.
Every mistake you identified, we made those mistakes and many more. I believe Kirkland’s team was ring master of the circus and the fraud and share guilt for all of it. I believe Kirkland had a hand in dreaming up the lies and obscurantism and charged $1,000/hr+ for their time. But I wouldn’t even complain about what you identified, which actually are acceptable forms of “puffing.” I’m sure there is much darker stuff. The optics are soooo bad.
What I don’t like—none of the mistakes were novel. Any old timer would tell you they aren’t going to work, will first discredit you and in the end will bankrupt you. Kirkland claims they are selling cutting edge strategy when what they sell is really just good old fashioned scumbaggery.
Wouldn’t it be great to know how much Kirkland was paid by CHK and related companies since 2000 and what do they claim they did for legal fees in the hundreds of millions.
Kirkland didn't pressure our geos to draw those core outlines larger than they really needed to be, or our planning groups to use overly optimistic price decks, or our land groups to overpay for leases, or our reservoir groups to overbook reserves, or our completion and drilling groups to oversell time and cost efficiency gains, or our production group to not live up to projected opex and downtime, or our marketing group to overpromise delivery volumes. Kirkland didn't go parade a laughable rosy image to the analysts every single quarter on our behalf.
We've done it to ourselves, just like many other failed O&G companies over the years.
The paradox of Kirkland making all that money off of a financial catastrophe they co-authorized makes no sense. Much in our history makes no sense. I remember in Zuckerberg’s book The Frackers where Zuck describes Tom Ward washing peoples’ feet at Good Friday services and thereafter people describing Tom Ward as “the greediest man I’ve ever met.”
That didn’t make much sense to me either. I’m a simple man.
Kirkland charging $1,000/hr. (note that is the average rate) is similar to Rudy Giuliani’s $20,000 dollar a day fee for legal work, which when presented in court, gets Rudy laughed out of the courtroom.
CHK paid a similar rate for Kirland’s corporate planning services (which turned out to be corporate alchemy of the most worthless sort) and ended up bankrupt.
Now CHK is paying Kirkland’s fees for Bankruptcy work.
That’s one heck of a scam.
Kirkland has been around CHK for a long time, like flies around what makes the grass grow green in Texas. The bankruptcy work is just the latest con they are working. What I want to know is whether or not Kirkland is going to repay us for their advice which ended up bankrupting us. Whose idea was it to pile up the debt. The debt was like a millstone around our necks.
Ask Tom Ward or Henry Hood what happens to you when you get a millstone around your neck.
You’ll end up paying $1,000/hr for bankruptcy work. Worse yet, you will be paying the fees to the same people whose big ideas bankrupted you.
I'm not saying that $1,000 an hour isn't overpriced, I actually don't know what the market rate is for legal services for a major company bankruptcy restructuring, $3 million per month actually doesn't seem that bad on first pass. Do you have any comps?
The thing is though that our capex program regularly exceeded 2 billion per year with next to nothing to show. Whine about the attorney fees or the christmas lights or whatever other excess spending, but none of that would matter if our wells paid out and generated the returns we said they would before committing to a very expensive development program.
“These legal fees are a drop in the bucket. It’s like saying we could have saved the company by switching to cheaper coffee and printing double sided.”
Paying legal fees of 3 million a month, at $1,000/hr, is not akin to cheaper coffee and printing double sided. Especially when you consider that the folks getting them legal fees dreamed up the hare brained financial schemes which bankrupted CHK. By my reckoning, that’s a hell of a financial whipsaw.
Numbers and financial analysis are not your strong suit boy! Leave em alone. It’s not hard to see why people are saying we will be liquidated with great minds like yours in the brain trust.
How is the lawsuit with the Attorney General’s Office going in Pa.? You remember right, the Royalty Ripoff???
We’re going to be liquidated because we drilled subpar wells for too much money as commodity prices fell. End of story. These legal fees are a drop in the bucket. It’s like saying we could have saved the company by switching to cheaper coffee and printing double sided.
As for the investors, everyone knew the game. Hype up the next big play, hype up the potential number of locations, hype up the expected efficiencies with field wide development. Every single quarterly update was the same for every single shale player. Spin spin spin, and don’t be holding the bag when the music stops.
Even all those BS year end metrics about finding x amount of profitable locations to drill. The rules for the game didn’t change when DL became CEO. He just couldn’t play the analyst game as well, so here we are.
The last video where F* bragged about having to pay out less than expected during bankruptcy was it for me. And let's waste $ on another rebranding name change too. There is no remorse for losing all that $ individuals banks and companies alike. No remorse
Of course they make $1000/hr. They suffered through the 3 year drunk known as Law School. It must have been terrible. Although you can't find one class about the oil and gas industry on the curriculum of 99.5% of all law schools (the 0.5 would have one introductory class) you come out qualified to advise oil and gas companies on how to operate and make over $1,000/hr.
It's the damndest thing.
Maybe Doug should have had a different conversation with “The Sweet Old Lady” when he talked to her.
Whoever said use PACER is right. The Epiq website is a nightmare to use and frequently it refers you the bankruptcy court’s website. I had to keep googling Epiq as each page that comes up just contains a few filings. I brought up the docket page on PACER and it has hyperlinks to every filing so it is much easier to use. I can’t believe what I’m reading. Were all done. I never dreamed it was this bad.
The comment stating 3 million a month in legal fees, at $1,000.00/hr, is nothing says it all. I’m sure in the last 20 years we had many, many months with huge legal fees payable. That is because we became other than an exploration company, we became a vehicle for raising money. That was our main business, raising money and getting papered up. Nobody cared that our wells lost money, we were too busy figuring out how to borrow money and pay back as little as possible.
Okay, knock yourself out. Good grief
Epiq works for chk right? I wouldn’t trust the cite to be complete. PACER is very easy to use including access to the 2000+ instruments of record off of one page. Remember the fee for any one instrument is capped at 3 dollars.
If you don’t want to set up a PACER account and then get charged .10/page, Google Epiq Chesapeake and see everything there. It’s free and faster.
To the person glibly dismissing 3 million a month in legal fees—we are going to be liquidated because of people like you. I make less than 30 dollars an hour with benefits. NO I don’t think people with law degrees should make 1000 dollars an hour advising exploration companies. It’s little more than theft. Our poor investors. I feel very badly that we let them down and lost their money, much of which came from retirement plans. Working at Chesapeake, I feel I have a scarlet letter on my forehead when I go to church on Sunday.
That’s right, in the grand scheme of things, the 50 to 100 million we spend on the bankruptcy is nothing and we are paying with other people’s money. We were able, with Kirkland’s help, to cancel stock which at one time had a value of 38 billion dollars and were only going to pay back a very small portion of the money we borrowed.
Since 2018, in Burleson County, TX (our sweetspot) we drilled 100 wells costing 10 to 20 million each.
Not one of the wells has production of 400,000 barrels;
6 of them have production in excess of 300,000 barrels;
17 of them have production in excess of 200,000 barrels;
41 of them have production in excess of 100,000 barrels; and
34 have production of less than 100,000 barrels.
At 40 dollars a barrel, 400,000 barrels equals 16 million.
With the Wildhorse purchase and the cost of the wells we spent 4 billion to get 6 wells that may have made a small amount of money. All the other wells lose money: drilling them is like buying 10-dollar bills for 20 dollars.
If it wasn’t somebody else’s money we are losing, it would be sad.
Who cares. That’s like half of a well.