HOUSTON (Reuters) - U.S. oil and gas producer Chesapeake Energy’s Chapter 11 bankruptcy plan was approved by a U.S. judge on Wednesday, giving lenders control of the firm and ending a contentious trial. Chesapeake will emerge from bankruptcy with about $3 billion in new financing, a $7 billion reduction in debt, and $1.7 billion cut from gas processing and pipeline costs. Investors who committed last spring to back the restructuring as energy tumbled stand to benefit enormously. A rebound in energy prices raised Chesapeake’s value to about $5.13 billion, the judge hearing the case said. Once the second-largest U.S. natural gas producer, Chesapeake filed for court protection last June, reeling from overspending on assets and from a sudden decline in demand and prices spurred by the coronavirus pandemic. Creditors who opposed the plan claimed Chesapeake was bankrupt long before it sought court protection and harshly criticized terms that gave backers including mutual fund giant Franklin Advisers Inc. heady returns. First-lien note holders stand to get a 130% return on their claims and Franklin 41%, but unsecured creditors will only recover about 4%, said Robert Stack, who represented unsecured creditors. The plan improperly favors a few at the expense of many, he said. His remarks drew a rebuke from bankruptcy court Judge David Jones. Chesapeake managers “should not be criticized,” said Jones, “they should be complimented,” citing the energy market crash. “I reject the assertion that people threw caution to the wind.” The plan will allow Chesapeake to emerge “a stronger and more competitive enterprise,” spokesman Gordon Pennoyer said. Jones refused to consider a last minute offer by an investment group led by Jefferies Financial Group to replace the financing that gave first-lien and Franklin heady returns. At the same time, Jones acknowledged his decision to allocate a significant number of share-rights to Franklin and others in exchange for their financing provided what he called a “good deal.” “I might have made a different decision with the benefit of hindsight,” Jones said. “The fact of the matter is I didn’t.”