Tuesday, April 23, 2013

Chesapeake, Bank of New York, square off in bond trial

Reuters reports that Chesapeake Energy Corp began an expedited trial on Tuesday against Bank of New York Mellon Corp over the energy company's effort to redeem $1.3 billion of notes at par.  The proceeding in Manhattan federal court comes less than two months after Chesapeake sued the bank, the trustee for the bonds, seeking to prevent it from interfering with the redemption.

Chesapeake, which faces a projected $3 billion cash shortfall this year, argues that it had until this past March 15 to notify noteholders that it intended to redeem the notes, which have an interest rate of 6.775 percent and mature in 2019, at par…..

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