By Ryan Dezember
In early 2008, now-deceased Oklahoma oil man Aubrey McClendon
pledged nearly a million dollars to the Ronald Reagan Presidential
Foundation as part of its drive to raise money for the celebration
of what would have been the former president's 100th birthday,
according to court papers.
But later that year, the financial crisis diminished Mr.
McClendon's fortune by sending commodity prices and shares of the
energy giant he co-founded, Chesapeake Energy Corp., into a
tailspin.
Mr. McClendon, according to papers the foundation filed in his
probate case, never made the first of his planned donations, a
$175,000 installment scheduled for the end of 2008. In the years
that followed, the organization says, it has only received $15,000
of the $975,000 that he promised before he died last year in an
Oklahoma City car crash. Now, the foundation is pursuing the
rest.
The nonprofit, which runs the Ronald Reagan Presidential Library
and Museum in Simi Valley, Calif., has asked the judge overseeing
the unwinding of Mr. McClendon's estate to reconsider its request
for $960,000 after its claim was rejected by lawyers representing
the oilman's estate, according to filings made in Oklahoma City
district court.
In a probate matter, lawyers for the deceased can reject a
claim, and claimants can ask a judge to revisit that decision.
Mr. McClendon's death has raised questions about how
aggressively recipients of pledges should pursue money that had
been promised before a person's death. Lawyers say that while
universities and nonprofit groups are within their rights to pursue
unfulfilled pledges, the aggressive pursuit of them can endanger
their ability to secure firm commitments from potential donors down
the line and alienate the heirs of benefactors.
Last year, Duke University sought nearly $10 million that Mr.
McClendon had promised to the school, his alma mater, but hadn't
paid before he died last March. Duke withdrew its claim after it
was reported by The Wall Street Journal. "While submitting such
claims is generally a routine procedure, in this case our action
was misperceived as adversarial to the McClendon family, which was
never the intention," a Duke spokesman said after the university
dropped its claim.
Charitable pledges are often legally binding if they've been
made in writing, lawyers say. Documented pledges typically have
standing similar to claims from other unsecured creditors in estate
cases like that of Mr. McClendon, according to legal experts.
Nonprofit groups are among the many creditors who have emerged
in Oklahoma City probate court claiming debts owed by the late
wildcatter, who borrowed heavily to finance new oil and gas
ventures after he was ousted from Chesapeake in 2013. His strained
financial situation doesn't appear to have slowed his philanthropy,
which was famous in his hometown and in Durham, N.C., where he and
his wife had given more than $20 million to Duke.
Lawyers untangling the web of assets and liabilities he left
behind have generally rejected claims stemming from unfulfilled
charitable pledges, court records show.
A pair of claims made by the Boy Scouts of America, for $500,000
and $5,000, were rejected in August. So was a $7,500 claim from the
Arts Council of Oklahoma City, which said an oil-and-gas venture
launched by Mr. McClendon after leaving Chesapeake had agreed to
sponsor a local arts festival this year but never sent a check.
The Reagan foundation appears unusual thus far in that it pushed
back against rejection, according to court records. Lawyers for Mr.
McClendon's estate rejected the claim in a November filing without
giving reason, court records show.
In a September letter to the lawyers representing Mr.
McClendon's estate, Glenn Baker, who was then the Reagan
foundation's finance chief, wrote that the group was made aware of
the estate's call for creditors through another energy tycoon, T.
Boone Pickens. Mr. Pickens, one of the organization's trustees, had
solicited and secured Mr. McClendon's pledge, Mr. Baker wrote.
A spokesman for Mr. Pickens, Jay Rosser, confirmed the account
and said Mr. McClendon made the pledge around the time he met Nancy
Reagan at a fundraiser at Mr. Pickens's North Texas ranch.
The foundation's letter was part of Dec. 30 filing that was
first made public this week.
At the time of his pledge, Mr. McClendon had shot to fame and
become a billionaire by embracing new drilling techniques including
hydraulic fracturing, or fracking, to coax a flood of natural gas
from shale rock formations. The newly minted billionaire agreed to
donate $975,000 to the celebration of the late president's
hundredth birthday, planned for 2011.
The foundation included in its request a one-page agreement
addressed to former first lady Nancy Reagan, who died last year,
pledging the sum in five chunks, beginning with $175,000 to be paid
by the last day of 2008 and subsequent $200,000 payments for four
years after.
"While he was never able to make any of the payments due to his
business circumstances, he consistently reaffirmed his intention to
eventually pay it, both to the foundation and to Boone directly,"
Mr. Baker wrote. "While we have not included it here, we do have
evidence of Aubrey's continuing intention to pay this pledge once
his financial situation improved."
Mr. McClendon did eventually send some money to the Reagan
foundation, paying $10,000 in late 2014 and $5,000 the next year,
according to a court filing.
Write to Ryan Dezember at ryan.dezember@wsj.com
(END) Dow Jones Newswires
January 12, 2017 11:28 ET (16:28 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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