Editor's note: A previous version of this article incorrectly stated that Chesapeake CEO Aubrey McClendon borrowed funds from the company, rather than from third-party financial institutions. The Fool regrets the error.
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What: Shares of Chesapeake Energy
So what: McClendon borrowed upwards of $1.1 billion from third-party financial institutions to help finance his participation in the company's Founders Well Participation Program, or FWPP, which has been around since the company was founded. Many analysts believe the potential exists for the arrangement to create a conflict of interest.
Now what: McClendon and Chesapeake maintain that there is no conflict of interest, and that McClendon's interests are appropriately aligned with shareholders. The company has no obligations to the transactions in any way. Chesapeake has issued a formal response to the report as well as provided additional information on its FWPP here.
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