You may have read the headlines last fall concerning the divorce of billionaire Harold Hamm in Oklahoma. Mr. Hamm is the CEO and majority shareholder of Continental Resources Inc., a company branded as “America’s Oil Champion”.
Hamm and his ex-wife Sue Ann Arnall spent nine-weeks in a trial that was shrouded in secrecy in order to protect the business relations and corporate secrets of Hamm’s company.
The main issue at trial was whether Mr. Hamm’s business acumen contributed to the substantial increase in the value of the company during their 25-year marriage, or whether market forces were the pivotal factor in its increase in value. Mr. Hamm argued that it was not his business expertise, a position that would substantially reduce his wife’s share of Continental’s value.
Imagine a CEO suggesting that a company grew in leaps and bounds, but it had nothing to do with his talent or business skills. Unhappily for Mr. Hamm, the court rejected his theory and awarded Ms. Arnall almost $1 billion dollars. But don’t feel sorry for Harold Hamm, he retained the company and a large chunk of his enormous wealth, totalling about $2 billion dollars.
Hamm’s lawyer declared it a victory, however, as the price of oil fell, and Continental shares lost value, he returned to court to persuade the judge to order a downward adjustment of his wife’s portion of the assets. The Court refused.
Meanwhile, Ms. Arnall was never happy with a third of the assets and filed an appeal.
Earlier this week, Mr. Hamm sent a cheque to his ex-wife for the sum of $975 million, but following her lawyer’s advice she refused to cash it, concerned that her acceptance of the money would prejudice her appeal.
Her refusal to take the money reminds me of a case I handled a decade ago. In my case the parties had a marriage agreement which provided that if the marriage ended, the husband would pay the wife the sum of $2 million dollars.
Sadly, the marriage ended, and as counsel for the husband I advised him to send a cheque for $2 million to his spouse. By then his wife had made it very clear through her lawyer that she believed the agreement was unfair and that $2 million was not nearly enough.
My client reluctantly provided me with a cheque that I delivered to his wife’s lawyer. A few days later she sent the cheque back to me. Another few days passed and I sent the cheque back to her. This time she kept it and cashed it. At the time, the interest rates were very high and my calculation of lost interest on the funds was substantial. A trivial matter for the very wealthy…
It’s “wait and see” as to how Ms. Arnell fares with her appeal, but she must be bolstered by the trial judge’s comments that she may be eligible for spousal support. Hard to believe that $945 million is not enough money to support yourself!
Lawdiva aka Georgialee Lang