Given the amount of money in play with the recent developments in the oil and gas industry, it comes as no surprise that litigation has increased. Typically, this is in the context of the business in which oil companies engage, but one oil company has been involved in its own internal squabbles.
The Chief Executive Officer (CEO) of Continental Resources, an oil driller, was recently sued by minority shareholders for conflict of interest. It seems that Continental Resources is building a pipeline for another company that just so happens to be controlled by Continental Resources’ CEO. This apparent conflict of interest has resulted in the shareholder litigation.
One of the main thrusts of the argument is that the CEO steered potential profits away from Continental Resources to his other company. As a result, the shareholders have requested that any and all profits from that other company be turned over to Continental Resources.
Becoming involved in a deal in which a shareholder’s self-interest is at stake is tantamount to opening Pandora’s Box. In this case, it may result in a judgment in the hundreds of millions of dollars.