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Chesapeake Energy to Start Tapping $925 Million Bankruptcy Loan

Chesapeake Energy Corp. has been cleared to begin drawing on a $925 million bankruptcy loan, a crucial first step in the oil-and-gas producer’s plan to eliminate billions of dollars of debt from its balance sheet in chapter 11.

The loan is designed to cover Chesapeake’s operating expenses and legal fees as it starts operating under bankruptcy protection after filing for chapter 11 on Sunday. The company is working to build a consensus with creditors on a restructuring strategy that would cut about $7 billion of debt and raise…