© 2014 The Texas Lawbook.
By Mark Curriden – (November 10) – A judge in Oklahoma on Monday ordered Continental Resources Chief Executive Officer Harold Hamm to pay his wife nearly $1 billion as part of the couple’s highly publicized divorce.
While the decision instantly makes Sue Ann Hamm one of Forbes magazines’ 100 richest women in the world, the amount is far less than the $6 billion she sought.
“This may sound crazy, but $1 billion is a huge win for Mr. Hamm,” says Charlie Hodges, a Dallas divorce lawyer who has followed the case. “Mrs. Hamm could have ended up filthy, filthy, filthy rich, but she will have be satisfied with just being filthy rich.”
In his decision, Oklahoma Magistrate Judge Howard Haralson ordered Hamm to pay his wife of 26 years $323 million in cash before the end of 2014. He has to pay $7 million a month for the next 93 months, when the judgment is fully paid. In addition, Mrs. Hamm gets the couple’s $15 million California ranch in Carmel Valley and the $5 million estate in Nichols Hills, Okla.
Brian Webb, a Dallas family lawyer also following the case, said the judge’s decision was “Solomon-like.”
“It is going to be hard for either side to complain or appeal,” Webb said. “The wife is getting $1 billion and the husband gets to keep his company.”
Any decision forcing Hamm to pay his wife $3 billion or more would have required the legendary oil man to sell so much stock that he would no longer have been the company’s majority shareholder, according to various financial valuation experts and stock analysts who followed the trial.
Wall Street analysts, worried about a huge judgment, wanted the Hamms to settle the case prior to trial.
Former Texas Family Law Judge Marilea Lewis, in an interview, said that many cases, including the Hamm divorce, ”scream for settlement” but they go to trial because people “feel their marriage has been violated and they want the world to know.
The judge also placed a lien on 20 million shares of Continental stock owned by Hamm, according to Reuters.
Hamm is widely acclaimed as the King of the Bakken Shale, where he owns more than 1.2 million acres of leases, by far the largest of any individual or company. Mrs. Hamm was a lawyer for Continental when the couple married in 1988. At the time, the oil and gas company was valued at $50 million. When she sued for divorce in 2012, the company was worth nearly $20 billion.
Harold Hamm’s story is truly a rags-to-riches tale. He was born the 13th child of sharecroppers in 1945. His family lived in a one-bedroom house with no electricity or running water. He sometimes skipped elementary school to help his father at his work picking cotton. His first job, at age 17, was pumping gas, changing oil and repairing flat tires.
At 22, Hamm borrowed $1,000 to buy a Bobtail Ford oilfield service truck, which introduced him to the energy industry. Meanwhile, he studied geology in his spare time, and, in 1967, he created his exploration and production company. His second well drilled struck black gold, producing 75 barrels a day.
Continental was valued at nearly $50 million a year in 1987 when Hamm’s first wife, Judith Ann, filed for divorce claiming he was having an affair with one of his lawyers, Sue Ann Arnall, who handled land deals for Continental.
A year later, Hamm married Sue Ann, who was a decade his junior, in a wedding in Las Vegas.
During the next two-and-a-half decades, Hamm focused Continental’s attention on oil and gas deposits in the shale in North Dakota. Continental went public in 2007. Since then, the company’s stock value has jumped nearly 500 percent.
The company’s value skyrocketed to upwards of $28 billion. Hamm became known as the “King of the Bakken.” Forbes magazine, which featured Hamm as its cover article in May, estimates his net worth at $19.4 billion, making him the 36th richest person in the world. Even so, media reports say he still lunches on burgers from Sonic and eats dinner at Applebees.
Meanwhile, Mrs. Hamm continued representing Continental in land acquisitions. Reuters, a news service, reports that the company in 1996 described her as a vice president over crude oil marketing in documents filed with the U.S. Department of Interior. That same year, she testified before Congress as a spokeswoman for Continental.
In April 2012, the Hamms attended Time magazine’s black tie gala, at which he was named one of the 100 most influential people in the world.
The couple hosted a fundraising event on May 9, 2012, for Mitt Romney, bringing in about $2 million for his presidential campaign.
A week later, she filed for divorce, accusing her husband of infidelity. Hamm’s lawyers claimed the couple had been involved in a loveless marriage since 1998. Court documents reveal that Mrs. Hamm secretly video recorded her husband’s activities at their home for years, though the videos have never been made public.
The judge ruled early in the dispute that Hamm got to keep everything he had, including his 122 million shares of Continental stock, at the time of the couple’s marriage.
But the judge also ruled that Mrs. Hamm could make a legal claim to any increase in the value of the stock or other assets if either of the couple’s actions during the past 26 years contributed to that increase, according to family lawyers familiar with Oklahoma law.
Webb, who has represented many wealthy professionals in big-dollar divorce cases, said the Hamm trial added “a bizarre twist.”
“The wife argued that her soon-to-be ex-husband is a wonderful and successful business leader who deserves all the credit in the world,” Webb said. “Meanwhile, the husband claimed that his company’s success was the result of basic market forces and dumb luck and has nothing to do with his leadership.”
As a result, the trial became a battle of valuation experts. The couple had no prenuptial agreement.
The lawyers for both sides did not respond to inquiries about whether they were considering an appeal.
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