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Permalink Reply by Alan Bowers on March 13, 2014 at 10:01am

The Mortgage is between CHK Utica LLC, Mortgagor and P. Nathan Bowles Jr as Trustee and Deutsche Bank Trust Company America, Mortgagee.  It includes assets in Ohio, PA, and WV.  A copy was filed in each county that has assets that were mortgaged on 09-05-2013.  In Columbiana County it can be found under instrument 2013-00012584.  It is a 509 page document.

There is a discussion on this web site that was started on 09-12-2013 relating to the Mortgage which has PDF files of some of the pages of the filing for all to read.

It took the Columbiana County Recorder months to link all the concerned parties in the document so they would come up when you do a search because the document was so large and so many people were affected.

I have seen the document listed as a "Mortgage" when you look at many of the affected parcels of land.

I have not seen anything listed with "memorandum of development" yet. Could you give an example/instrument number of a parcel that you found with "memorandum of development" on it that would point me in the right direction?

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Permalink Reply by Kathleen on March 13, 2014 at 10:47am

Hi,

I can't copy and paste it. Memorandum of development, Document number 2013-00013642. Book 1992 page 1.

When I read the mortgage it is saying these parcels are being held as collateral, that's why I'm wondering how they couldn't re-lease these properties if they do not get them HBP before the leases run out. Your right the file is over 400 pages. Most of it is the names of the mineral owners.
I know they can pay back the open loan before these leases expire but what happens if they don't?

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Permalink Reply by evan on March 13, 2014 at 10:57am

Another way to hold you ?  Also brings up a good point to somehow get language in a lease that prevents them from doing this..

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Permalink Reply by Kathleen on March 13, 2014 at 11:11am

Hi,

I'm not looking at it like that at all. I know a bunch of people that would love to re-lease and get the bonus money again, but they think CHK is going to walk away from the area without leasing them again. They also think no one will want them so CHK is better then nothing.
That's why I'm wondering if these mortgages filed on the deeds hold CHK to the mineral owner.

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Permalink Reply by Linda Summers on March 13, 2014 at 11:38am

Does anyone know what a "Memorandum of Development" means?  I see my lease was mortgaged to Deutsche Bank and Memorandum of Development recorded in September, but never showed up on Recorders site until recently.

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Permalink Reply by INVICTUS on March 13, 2014 at 12:19pm

"Memorandum" means that there exists a document between parties that is private and not recorded. Only the fact that it exists is recorded.

It serves to place the world and all who have interest in a parcel that a document does indeed exist that may affect the parcel in some way, that the parcel is in some way encumbered.

The development part is whatever the document is. It's a secret between the parties.

Memorandums are common.

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Permalink Reply by george m vietze on March 13, 2014 at 1:17pm

Banks loan money to companies that collaterize the loans with their interest in leased assets.  In the case of gas companies that have leases on land the leasehold interest (lessee on a gas lease) is an asset.  The gas companies pledge those leases as collatoral for loans.  From the banks position, those leases are  better collateral if they produce money to pay back the loan and that the money borrowed are used for specific leases

that become part of a Development Plan as spelled out in the Memorandom of Development.

The bank may require the borrower to provide a Memorandom of Development or a business plan to use the money borrowed to develop the leasehold interest by producing wells to generate the cash to repay the loan. Otherwise the money borrowed could be used for other more general purposes and in the event of default the bank would end up with

interest in land leases that are undeveloped.

In the event of default by the borrower the lender would be in a position to foreclose on the lessee's (gas companies} interest in the lease.  This is only a lien or encumbrance on the gas companies interest in the lease and is not an encumbrance on the land owned by the lessor (land owner).   The gas company cannot pledge or borrow money on assets they do not own (ie: your land).

My experience is in land development and not gas leases and someone with specific experience in the gas industry could expand on their understanding.

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Permalink Reply by Linda Summers on March 13, 2014 at 1:44pm

Thank you for your explanation.  It makes sense.

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