Section 382 Rights Plans continue to gain momentum. Various energy companies, including Chesapeake Energy Corporation, are putting them in place to protect their tax NOLs.
On April 23, 2020 Chesapeake Energy Corporation (NYSE: CHK) announced that its Board of Directors adopted a Section 382 Rights Plan.
Chesapeake is natural gas and oil company.
As of December 31, 2019, Chesapeake had approximately $7.6 billion of federal NOLs available.
These NOLS could be used to offset its future taxable income.
Section 382 could impairChesapeake’s ability to use these NOLs.
The Section 382 Rights Plan will expire on the close of business on the day following the certification of the voting results for the 2021 annual meeting, unless Chesapeake’s shareholders ratify the Section 382 Rights Plan at or prior to such meeting, in which case it will continue in effect until April 22, 2023, unless terminated earlier in accordance with its terms.