By Ryan Dezember and Kevin Helliker
Duke University made a claim on the estate of oil magnate Aubrey
McClendon, saying the Chesapeake Energy Corp. co-founder died
before he could make good on roughly $10 million of pledges.
Mr. McClendon, who graduated from Duke in 1981, became a major
benefactor of the North Carolina college after he struck riches in
the oil patch. When he died in March in a car crash in Oklahoma
City, Mr. McClendon had unfunded commitments to Duke totaling
$9,942,000, the university said in a probate court filing that
became public late Tuesday.
That figure represents roughly half of the $18.75 million that
Mr. McClendon pledged to Duke in recent years for athletics funds,
scholarships and campus- improvement projects, according to the
filing.
A Duke spokesman declined to comment. Tom Blalock, a longtime
associate of Mr. McClendon who is administering his estate, didn't
respond to requests for comment.
Mr. McClendon's creditors, which so far range from Wall Street
banks to a former employee to an agricultural-equipment maker, have
until Sept. 16 to file claims against the estate, which is being
unwound in an Oklahoma City district court.
The famous wildcatter left behind a vast tangle of assets and
liabilities when his speeding Chevy Tahoe crashed into a concrete
underpass the morning of March 2. He had been ousted from
Chesapeake over corporate-governance issues three years earlier and
had leveraged many of his personal holdings to finance a comeback
bid.
Collapsing oil prices in late 2014 strained the new oil-and-gas
empire he had assembled, and he struggled in his final year to
raise more cash to keep it afloat.
Oklahoma records show he had pledged assets as collateral for
loans including his roughly 20% stake of the Oklahoma City Thunder
basketball team, fine wine, investments in tech startups and
antique boats.
Lawyers for Mr. McClendon's creditors have said they think Mr.
McClendon, who during his Chesapeake heyday was a billionaire, left
behind more debt than assets.
"Based on information we have thus far, we believe this is an
insolvent estate," Arthur Hoge III, a lawyer representing
Wilmington Trust Corp., said in a May hearing in Oklahoma City. Mr.
Hoge said Mr. McClendon died owing his client, a unit of M&T
Bank Corp., more than $465 million.
Martin Stringer, a lawyer for Mr. McClendon's estate, said
claiming it
is insolvent is "incorrect" because "nobody has the facts,"
according
to a transcript of the hearing. The value of many assets
"depends on
commodity prices," he added. He said that the estate
includes
interests in more than 180 companies and other business
ventures.
Duke's claim is unique in that it is the only one yet tied to
the oilman's charitable giving, for which he was well known in his
hometown and at his alma mater.
At Duke, Mr. McClendon met his wife, Kathleen McClendon, who
graduated in 1980. The couple sent each of their three children
there. He built Chesapeake's Oklahoma City headquarters, with rows
of redbrick Georgian buildings, in the image of Duke's Durham,
N.C., campus.
Mr. McClendon's largess was well known at Duke. McClendon
Commons is adjacent to an admissions office. The McClendons gave at
least $1.2 million for the restoration of a massive pipe organ in
the university's chapel now known as the Kathleen Upton Byrns
McClendon organ. The university in 2002 tried to memorialize the
couple with a pair of gargoyles carved in their likenesses and
installed above an entrance to McClendon Tower, a dormitory, but
the couple insisted they be removed, according to local news
reports at the time.
Mr. McClendon's gifts to Duke exceed $20 million, according to a
person familiar with his giving.
It is unclear whether Duke will be able to collect the
outstanding pledges. Besides the estate's solvency, there will be a
question whether there was a contract between Duke and the donor,
said Richard Marker, a professor of philanthropy at the University
of Pennsylvania and New York University, who added that he knows
nothing about Mr. McClendon's pledge to Duke. "If there's a signed
letter of commitment," he said, "generally speaking, that's
considered legally binding."
But even if Duke's legal position is strong, pursuing it
aggressively might be counterproductive, said Doug White, former
director of the nonprofit management program at Columbia University
and an author of books on philanthropy. "How positive is it to see
a university sue a donor?" he asks. "The attorneys at Duke aren't
going to take that into account. But the fundraising office or
president's office ought to take that into account."
Write to Ryan Dezember at ryan.dezember@wsj.com and Kevin
Helliker at kevin.helliker@wsj.com
(END) Dow Jones Newswires
August 24, 2016 05:44 ET (09:44 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Chesapeake Energy (NASDAQ:CHK)
Historical Stock Chart
From Aug 2024 to Sep 2024
Chesapeake Energy (NASDAQ:CHK)
Historical Stock Chart
From Sep 2023 to Sep 2024