K & L Gates Sued Over Failed Chesapeake Investment

Law360, Dallas (February 25, 2013, 7:40 PM ET) — K&L Gates LLP was sued Thursday for $15 million by a Texas business that says the firm rushed a deal to invest in a Chesapeake Energy Corp. unit without performing due diligence or disclosing conflicts of interest, costing the business its entire investment.

The suit, brought by Dean Hazen through his Hazen Ng LLC, alleges K&L Gates attorneys duped him into a commitment to invest in a farmout deal with Chesapeake Appalachia LLC in 2009, but failed to perform due diligence on Hazen’s would-be partner in the deal and didn’t adequately disclose their conflicts of interest. Hazen says he lost $5 million from the investment and wants triple damages because of K&L Gates’s alleged gross negligence in arranging the transaction.