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AEP investor settles Chesapeake lawsuit targeting ex-CEO

* Chesapeake to receive $25 million and oil-gas leases

* Settlement raises questions about EMG's support for McClendon

* McClendon's AEP still faces trade secrets lawsuit

* AEP says McClendon had rights to Chesapeake data (Adds details of settlement, comment by legal expert)

By Brian Grow and Joshua Schneyer

April 14 (Reuters) - Energy & Minerals Group, a major investor in new oil and gas ventures launched by former Chesapeake Energy Corp CEO Aubrey McClendon, said on Tuesday it has settled a lawsuit alleging the oil executive stole his former employer's trade secrets.

Houston-based EMG, a private investment firm, had originally defended McClendon and called Chesapeake's claims "meritless."

The settlement could raise questions about whether EMG, which has invested more than $3 billion in ventures formed by McClendon since 2013, may be separating itself from McClendon, a successful oil and gas executive who co-founded Chesapeake in 1989. He resigned from the company in 2013 following a corporate governance crisis.

He then formed American Energy Partners (AEP), a new venture whose financial backers have included EMG.

Chesapeake in February sued AEP and affiliates, American Energy-Utica, and unnamed investors, alleging McClendon stole trade secrets from his former company and that the defendants used them to raise new funds and buy oil and gas land leases.

In its claim filed in Oklahoma County District Court, Chesapeake alleged that before McClendon left the company, he "misappropriated highly sensitive trade secrets" and used them to recruit investors and buy land leases for AEP.

Chesapeake alleges the information was used to acquire drilling rights on land in the Utica Shale formation.

AEP and McClendon have denied Chesapeake's charges. They contend that McClendon's separation agreements from his former company allowed him access to an array of Chesapeake's oil and gas leasing information.

EMG said on Tuesday it reached an agreement with Chesapeake to remove AEU and unnamed investors from the lawsuit filed by Chesapeake. AEU is an oil and gas venture focused on the Utica shale play. Although it is affiliated with McClendon, AEU is controlled by EMG, which is led by John Raymond.

Chesapeake will drop all claims against AEU and the unnamed investors in exchange for approximately 6,000 acres of oil and gas leases in the northern Harrison County region of the Utica shale play in Ohio, and up to $25 million in cash, EMG said.

A series of Reuters stories in 2012 examined how McClendon had entwined his personal finances with those of Chesapeake. Following a liquidity crunch and a shakeup in its board, McClendon departed Chesapeake in April 2013.

Chesapeake's lawsuit against AEP, where McClendon is CEO, and several other entities linked to him will continue. McClendon is no longer an officer of AEU, EMG said.

"Although Mr. McClendon is a director and the single largest non-institutional shareholder in AEU, he did not approve the settlement and neither he nor AELP were advised of the negotiated terms of this settlement," said AEP in an emailed statement.

EMG and AEU had earlier called Chesapeake's lawsuit "meritless," and said their Utica leasing did not rely on Chesapeake trade secrets. EMG also said that AEU should not have been included in Chesapeake's lawsuit.

The full terms of the settlement remain confidential.

EMG likely considered the allegations serious enough to settle out of court and separately from McClendon, said one independent expert.

"Nobody settles a lawsuit by paying $25 million and signing over 6,000 acres of valuable oil and gas leases unless they are at least a little bit troubled by what they have learned," said Erik Gordon, clinical assistant professor at the University of Michigan Ross School of Business.

Chesapeake declined comment. EMG declined further comment.

AEP and McClendon want the legal dispute resolved through arbitration and say that is required under the terms of McClendon's separation agreements with Chesapeake.

Chesapeake shares were up 3.4 percent at $15.27 on Tuesday afternoon.

(Reporting by Brian Grow in Atlanta, Joshua Schneyer in New York and Anna Driver in Houston; editing by Jeffrey Benkoe and Matthew Lewis)