On May 29, 2014, Andrews & Springer LLC filed a class action and derivative lawsuit on behalf of public stockholders of Cheniere Energy, Inc. ("Cheniere" or the "Company") against Chief Executive Officer ("CEO") Charif Souki and certain Cheniere executives and the Company's board of directors. Among other things, the complaint alleges that Cheniere’s management team and board breached the terms of the company’s bylaws as well as their fiduciary duties to the company and its shareholders.  The complaint also alleges that the defendants were unjustly enriched by the hundreds of millions of dollars of stock awarded to them in 2013 by the board.  The lawsuit also seeks to enjoin an upcoming shareholder vote on a board proposal for a 30 million share increase for future stock awards until defendants have made full and fair disclosure about both previous stock awards and the current share reserve increase proposal.

As a recent Wall Street Journal article noted, the 30 million additional shares that the board is seeking to have available to grant as stock awards to the CEO, executives, board members, other company employees and consultants would be valued based on the stock’s market price today (as of May 29, 2014) at $1.9 billion, more than all the revenue Cheniere has generated since 2008.  The article further noted, among other things, that a well-known proxy advisory firm, Glass Lewis & Co., has concluded that the proposed compensation plan could be excessive and dilute existing shareholders’ stake by 12%.  The article also notes that another advisory firm, Egan-Jones Proxy Services, recommends that shareholders reject the board’s proposal.

On June 2, 2014, Cheniere announced in a filing with the SEC, that "it has decided to postpone the 2014 Annual Meeting of Stockholders of the Company, scheduled to be held at 9:00 a.m., Central Daylight Time, on Thursday, June 12, 2014, in light of a complaint that has been filed in the Delaware Court of Chancery of the State of Delaware styled Jones v. Souki, et al., C.A. No. 9710-VCL (Del. Ch.) and plaintiff’s request to expedite proceedings before the June 12th Annual Meeting. The 2014 Annual Meeting will now take place on Thursday, September 11, 2014." 

A copy of the complaint can be accessed here. If you have any questions about the case you may contact Craig J. Springer, Esq. toll free at 1 (800) 423-6013 or by email at cspringer@andrewsspringer.com.