Many millionaires and billionaires cover themselves with pre-nuptial agreements to protect their fortunes in case of divorce, but a surprising number do not. Among the latter group is Oklahoma billionaire Harold Hamm. His failure to have any sort of prenuptial agreement could cost him billions of dollars and result in the largest divorce settlement is U.S. history, if not the world.
Hamm is the primary stakeholder in Continental Resources, one of the largest oil producers in North America and the largest leaseholder and producer in the booming Bakken field in North Dakota and Montana. Arguably, Hamm owns more oil in the ground than any other American does.
Hamm’s estranged wife, Sue Ann, filed for divorce in May 2012, and the couple agreed on a no-fault divorce and a separation date at that point. The proceedings are now in the valuation phase, with some sort of resolution expected later in the year.
Two major factors will determine how much money Sue Ann Hamm receives.
- Contribution to Valuation – Under Oklahoma law, increases in the net worth that are related to the active efforts of either spouse becomes a component of the marital estate. Sue Ann Hamm was a former lawyer and executive for Continental, thus she could potentially be judged to have some role in the increase in Continental’s value.
Meanwhile, to reduce the marital pool to be split, Harold Hamm’s lawyers are in the odd position of claiming that the multi-billion dollar increase in the value of Continental was not purely a result of Harold’s active efforts and astute capabilities, but was “beyond his control”. Given public and press statements crediting his outstanding business acumen, that argument is not likely to work.
- True Separation Date – While there is apparently legal agreement on a 2012 separation date, Harold Hamm’s lawyers are claiming an effective separation date well before that.
A Reuters story lists sources as saying that Harold Hamm had previous court filings claiming a separation date of 2003. The documents claim that Sue Ann and the couple’s two daughters moved out of their home in Enid, OK, and relocated in the suburbs of Oklahoma City, approximately 100 miles away. Harold Hamm’s attorneys are claiming the couple led effectively separate lives since that time.
The date is important because the assets to be divided do not include those accrued after separation. Estimates of Harold Hamm’s total wealth range from $11 billion to $20 billion, with the vast majority of that accrued during the marriage – and a significant amount of that coming since 2003.
Estimates of Sue Ann Hamm’s potential take range from $2 billion to as high as $8 billion. It will almost certainly be the highest divorce payout in U.S. history, surpassing the $741 million that casino king Steve Wynn gave up to his ex-wife in 2010 and the $460 million settlement of McCaw Cellular founder Craig McCaw in 1998.
It may be the highest divorce settlement in the world. Russian billionaire Dmitry Rybolovlev set the bar pretty high with his $4.5 billion judgment back in May, taking the crown over from Rupert Murdoch and his $1.7 billion dollar divorce settlement with his second wife in 1999. At least Rupert appears to have learned his lesson – his divorce settlement with his third wife, Wendi Deng, ended cordially with the terms sealed, reportedly covered with pre- and post-nuptial agreements.
As to Harold Hamm, and how he will fare after parting with the largest divorce settlement in history, here’s guessing that he will find a way to muddle through somehow with his remaining $5-10 billion. That is what some people might call a “first-world problem.”