Oil CEO Ordered to Pay $1 Billion in Divorce Ruling
One of the largest divorce judgments in United States history was rendered this week, when Continental Resources Chief Executive Officer Harold Hamm was ordered to pay nearly $1 billion to his ex-wife.
After a nine-week divorce trial that ended last month, Oklahoma Judge Howard Haralson ruled, in an 80-page decision, that Sue Ann Hamm should receive a total of $995.5 million, among other significant assets.
And it would seem that Mr. Hamm got off lightly. The marital estate was estimated to be worth at least $18 billion, largely tied up in Continental shares, and Ms. Hamm sought a much larger sum than what she was awarded.
Mr. Hamm controls 68% of the oil company’s stock, and the ruling does not require him to part with those shares. Still, Ms. Hamm will shortly become one of the 100 wealthiest women in the U.S.
Judge Haralson ordered Mr. Hamm to pay one-third of the financial award, or $322.7 million, by the close of 2014. The remainder of the judgment will be paid out in monthly installments of $7 million, plus interest.
The Hamms were married in April 1988 and had no prenuptial agreement. It was Mr. Hamm’s second marriage, and his first wife accused him of having an extramarital affair with Ms. Hamm. In 2012, Ms. Hamm asked Mr. Hamm to move out of the marital home, and the subsequent divorce filing listed only “irreconcilable differences” as a ground, although allegations of infidelity surfaced in other pleadings.
Mr. Hamm’s stake at Continental has dropped significantly since the start of the trial, as shares at the company have lost approximately 30% of their value in just four months, largely resulting from reductions in world oil prices.
The divorce trial took place behind closed doors, in an effort to protect the interests of Continental, as it is a publicly traded company. A handmade “Do Not Enter” sign was placed outside the courtroom, and most of the voluminous pleadings in the case were placed under seal. Judge Haralson ruled that “confidential financial information” about Continental should be kept under wraps, as it could be damaging to the oil giant.
Under Oklahoma law, as in Virginia, enhancement of wealth that is caused by the efforts of either spouse is marital and subject to equitable distribution. Thus, Ms. Hamm’s legal team called expert witnesses to testify that Mr. Hamm’s singular leadership was directly responsible for the company’s growth during the 26-year marriage. Meanwhile, Mr. Hamm’s lawyers argued that an exponential increase in Continental’s stock value was largely due to market factors beyond his control, such as a long-term escalation in oil prices. They were forced to argue that Mr. Hamm essentially got lucky, and that passive growth was inevitable no matter who was in charge.
Mr. Hamm’s arguments appear to have carried the day, as Judge Haralson found that his efforts played a central role but not nearly to the level attributed by Ms. Hamm’s attorneys and experts. The judge cited other factors in Continental’s success, such as additional leadership figures at the company, advanced technologies and rising oil prices.
Under the ruling, Ms. Hamm will also receive a $17.5 million ranch in Carmel, California and a $4.7 million home in Oklahoma City. Mr. Hamm will keep a house in Branson, Missouri, an office building, an airplane worth $10 million, and two horses named Star and Uno at a California ranch.
Mr. Hamm was named one of Time magazine’s 100 most influential people in the world in 2012. Even after the conclusion of his divorce, he remains one of the 50 richest Americans.
Are you a wealthy oil tycoon seeking family law representation in the Commonwealth of Virginia? The experienced divorce attorneys at Livesay & Myers, P.C. can help to unwind your marital estate in an equitable manner, without your wells running dry.