Oklahoma fracking billionaire Harold Hamm argues plunging oil prices should entitle him to a break on the almost $1 billion in alimony awarded his ex-wife. She contends the award is too small.
The couple’s divorce battle returns to court today as the Continental Resources Inc. chief executive officer battles with Sue Ann Arnall, his wife for 26 years, over who got the short straw in a November divorce decree. He contends the order giving him Continental stock and her cash and real estate means she’s getting more than the judge intended because of the company’s declining market value.
Arnall is also asking the judge to order Hamm to immediately turn over at least $266 million to pay her bills while both appeal the original award.
State Court Judge Harold Haralson in Oklahoma City ordered Hamm to pay $972 million of his then-estimated $16.1 billion oil industry fortune to Arnall. Divorce attorneys called the ruling a victory for Hamm, expressing surprise that a billionaire’s spouse didn’t get as much as 30 percent of the couple’s assets.
Declining oil prices and Continental’s falling share price have eroded Hamm’s victory. Since the divorce trial ended Nov. 10, oil hit a five-year low and Continental dropped 36 percent. As measured by the Bloomberg Billionaires Index, Hamm’s net worth has been reduced by a third to $9.6 billion. Continental fell almost 11 percent to $34.65 yesterday in trading in New York.
Assets’ Value
Arnall is asking Haralson to reconsider the initial award and explain how he valued the marital assets. She appealed his Nov. 10 decision, saying the quarter-century she spent at Hamm’s side entitled her to a greater share of the couple’s fortune.
Hamm claims the value of his stake in Continental, the company credited with pioneering shale drilling in the Bakken oil basin of North Dakota and Montana, has dropped to “just over $9.4 billion,” according to a Dec. 22 filing. Arnall claims the oilman is still worth about $18 billion, taking all his holdings into account.
“Where the other half of the alleged $18 billion estate” might be lurking is “a mystery,” Hamm said in the filing. He said he “is going to have to borrow money in order to pay this judgment to petitioner; there is no reason she cannot borrow money to finance her appeal” of a judgment in her favor.
The judge based Arnall’s portion primarily on Continental’s stock price, which he pegged at $116.12 a share to account for a two-to-one stock split that occurred during the divorce trial. Hamm got to keep all the couple’s Continental shares, as the judge ruled that he founded the company before the couple married in 1988.
‘Post-Trial’ Conditions
Arnall’s lawyers contend Hamm’s bid to recalculate the alimony should be disregarded, as most of the drop occurred after the trial ended.
“Temporary, post-trial market conditions are not relevant,” Ron Barber, one of Arnall’s lawyers, said in a Dec. 31 e-mail. “Commodity prices was only one of many factors involved. Looking at selected factors over a very limited timeframe is meaningless.”
West Texas Intermediate crude rose 0.4 percent yesterday after sinking as much as 5.5 percent last session to $49.77 a barrel, the first time it has fallen below $50 since 2009. The drop came amid speculation rising global output will exacerbate a supply glut that’s driven prices into a bear market.
Haralson awarded Arnall the couple’s $4.7 million home in Nichols Hills, Oklahoma, and their $15 million ranch in California’s Carmel Valley.
Hamm, under the original divorce decree, was to make an initial payment of about $322 million to Arnall by the end of December, with the balance due in $7 million monthly installments until the entire $972 million alimony award is paid.
Arnall offered to take just $266 million in initial funds instead, to cover “substantial” maintenance and upkeep expenses that she said have “deluged” her since the divorce.
The case is Hamm v. Hamm, FD-2012-2048, District Court of Oklahoma County, Oklahoma (Oklahoma City).
