If you are considering going after CHK for underpayment of royalties, there is another law firm looking for you here in Bradford County. It is the McDonald Law firm from Ft. Worth. They have been after CHK in Texas and have now followed them to the Marcellus gas field. They held several local meetings this past week but were only advertised in the Pennysaver so people may not have seen them. I was not sure if I'd go, they have a website ( royaltyripoff.com ) and the name sounded a bit "over the top" to me, but did attend after all. Meeting was packed, if you follow the whole royalty issue there was not anything in the way of earth shaking news but they seem to be an established and competent firm. They are going ahead on a contingency basis for fees and you can get a copy of their representation contract on the website. They are planning to hold more meetings in this area, expecting the next round to be the second week of October. If you're leaning towards doing more than complaining about the royalty issues, check them out for yourself.
I have an idea that will require several royalty statements without personal data from OH, PA and WV. I'm looking at Well Theft which affects many people at the same time rather than lease violations.
If you would consider sending me a royalty statement or several if you are getting stolen from different ways each month as I am. The state authorities won't listen if you talk lease, you have to talk well theft.
I've gotten 3 royalty statements and CHK is starting to vary their method of theft to hold us at $150 per acre regardless of well production.
email me at email@example.com
I hope this law firm is able to help our Bradford County landowners. Willingness to move forward on a contingency basis indicates they believe there is reasonable chance for success. Lawyers value their time above all things. They would not pledge use of their time if they expected a good outcome to be unlikely.
There is one other aspect, though, another yardstick:
If the law firm is demanding to be paid too high a percentage of whatever recovery they garner on behalf of landowners, that would be troubling. Their calculus does include likelihood of victory, as already stated, but it also includes size of payoff in event of victory. To use an extreme example, just to make the point:
If the law firm (internally) saw only a 25% chance of victory over Chesapeake, but if they were able to negotiate with landowners for 80% of their recovery, the law firm might still go ahead with the action. But their willingness to proceed in this example would not necessarily be a good and hopeful sign for landowners.
Details of their fee are included in the contract which can be found on their website. They will take 39% of the gross recovery plus up to a 10% capped amount for expenses ( so a maximum of 49% of the gross recovery). I really don't know where this stands on the spectrum of legal fees, but I get the impression that firms doing class actions (which this is not) often end up with more than 50% of the settlement amount. One of the other firms chasing CHK proposes to take 30% of the recovery, plus expenses and in addition will continue to collect 30% of the differential on royalties for the next 3 years after settlement for existing wells and any new wells drilled in the unit. All in all, I would not consider McDonald's fees to be excessive. They have also had some successes with their suits in Texas so must have some idea of the likelihood of recoveries here as well.
Gosh, I dunno. 50% is really a lot of money.
I do agree regarding class action suits, about which I know a little more. In a typical class action, the lawyers get almost everything!
I agree, 50% (or 49%) is a lot, but I sort of look at it in the same terms as my lease itself. In both cases the other party.... gas company or lawyer.... is putting up the cash and resources to pursue a potential payoff. I have not heard of any leases that will pay you as much as 25% of the income from the investment, so this does not seem like a raw deal to me. I also compare it to the proposed class action settlement with CHK a while back (I think it was Demchak ?), which would only have given the royalty holders pennies on the dollar of the excess deductions.
Talked with McDonald today.
In my experiences, their fees are not out of line with contingency legal actions and other such lawsuits.
The 10% is a ceiling, or limit, of expenses charged and actually if it amounts to 5% or 10% it would not be charged to each client, but rather, is divided and then split among all royalty owners of each particular unit.
Once settled, there is no future percentage deducted from royalties to be paid to McDonald.
I researched McDonald's firm and read several articles in Texas newspapers that substantiate their efforts and involvement in this type of legal endeavor.
That's an excellent point, John. I did not think of it. Am glad you posted!
My only issue with the lawyers is Mc Donald Law Firm takes 39% of what you were owed as a fee and then another 10% for expenses...I read their contract. The DOJ is also involved in an investigation of the theft of our royalties. Going to court to collect is a bad idea that actually benefits CHK as they pay only what the judge orders them to....in many cases it might not be really what you are owed.
However, it should be noted that the Commonwealth of PA has allowed us to be short changed by failing to pass/enforce laws that require we be paid according to the terms of our leases. I do not know how much money CHK donated to each individual politicians campaigns but I have read Corbett was given in excess of $500,000.00.....they have found it is far cheaper to pay off politicians with campaign donations than to pay royalties in my opinion. While they refuse to protect us they have no problem taxing the crumbs we are being given thrown.
I have yet to receive a royality check. I am waiting for pipe line hook up. I hope they clear this unjustified theft soon. dave