Chesapeake Energy And Energy Transfer Skirmish: Contract Rejection (OTCMKTS:CHKAQ)

Chesapeake Energy filed for bankruptcy, opening the opportunity to reject midstream contracts.

While Energy Transfer and others have asked FERC to intervene, it is unlikely in my opinion that the FERC ruling holds any weight.

The plight of the Tiger Pipeline is only a small issue for Energy Transfer, but investors need to watch this aspect of midstream earnings risk closely going forward.