The stakes have been raised in the ongoing 2-year battle between a group of oil and gas investors of American Energy-Utica (“AEU”) and the company’s former counsel, Duane Morris. The Investors filed their complaint in Texas principally due to the actions of Chesapeake’s (and later AEU’s) past CEO, Aubrey McClendon. In 2016, McClendon was indicted for bid-rigging and died the subsequent day in a one-vehicle accident.

The plaintiffs, who are investors in American Energy-Utica (“AEU”), claim that Duane Morris committed malpractice due to a conflict of interest between them and McClendon, and also failing to advise them about claims Chesapeake was going to bring against them. The investors claim that they were represented by Duane Morris at the same time as the firm represented McClendon; but, failed to disclose that their interests were materially adverse.

The investors allege that Chesapeake issued a demand letter to McClendon in January 2015 claiming that the investors and McClendon stole its trade secrets. Duane Morris allegedly never informed the investors and attempted to negotiate on McClendon’s and their behalf. Their efforts failed however and Chesapeake ultimately filed a lawsuit which was eventually settled.

The investors are seeking the recovery of the settlement amount. But, now claim that they have lost profits and business as a result of Chesapeake’s allegations in the underlying suit which should have been prevented.

The case is styled Ascent Resources – Utica, LLC, et. al v. Duane Morris, LLP, No. 2015-46550 and is pending in the District Court of Harris County, Texas.

Alex Passo and the Patterson Law Firm, LLC handle legal malpractice actions throughout Illinois and Indiana. If you have a legal malpractice claim that you would like to discuss with Alex, you may reach him at (312) 750-1820 or apasso@pattersonlawfirm.com.