A judge in Oklahoma presiding over the divorce trial of Harold Hamm -- the founder, majority owner and CEO of Continental Resources Inc. -- has ruled that he must pay his ex-wife nearly $1 billion in alimony, with 20 million shares of the company's stock held as collateral.
On Friday, Oklahoma County District Court Judge Howard Haralson awarded Sue Ann Hamm -- soon to be Sue Ann Arnall -- about $25 million in marital property, while Harold Hamm received assets totaling more than $2 billion. The judge ruled Harold Hamm must pay half of the difference in the assets, more than $995 million, to his ex-wife.
According to the ruling, Sue Ann Hamm has already received more than $22.7 million from her ex-husband, with the total amount of alimony owed at about $972.7 million. Harold Hamm is required to pay his ex-wife $322,731,842 by Dec. 31. For the remaining $650 million, he will be required to pay a minimum of $7 million a month, beginning Jan. 20.
Haralson also put a judgment lien on 20 million shares of Continental stock, after a stock split that occurred while the trial was in progress. Under the terms, for every $32.5 million reduction in principal, one million shares of the company's stock will be released.
According to court records, on the day Sue Ann Hamm filed for divorce, May 18, 2012, Continental's stock price was $71.31/share. Testimony indicated that the stock price had increased to more than $150/share during the divorce trial. It ended at $58.06/share on the last day of the trial, Oct. 9. The court used $116.12/share as the price for a ruling.
Court records also showed that Harold Hamm bought 100,000 shares of Continental stock in May 2012, and he was awarded 623,340 shares between 2005 and 2011. He bought another 525,100 shares after the company went public. The court said the CEO held more than 122 million shares of the company, although other reports said he owns more than 253 million shares.
Haralson explained the rationale behind his ruling.
"In cases where the post-separation increase in value of a business is due to the continued effect of the pre-separation efforts, skills or funds of the owning spouse, the court concludes that it should use a valuation date closer to the date of trial, absent any special circumstances that would make such a date unfair," the judge said.
"In carrying out the statutory mandate to make a 'just and reasonable' division of the marital estate, the term 'just and reasonable' essentially means that the division should be equitable, which is not necessarily synonymous with 'equal.' Within this boundary, the trial court has considerable discretion in determining the division of marital property. There is no fixed rule or percentage as to what division to make, since each case depends upon its own facts and circumstances."
Last August, Haralson barred media and the pubilc from hearing opening statements in the trial over concern confidential information could be disclosed and damage Continental (see Shale Daily, Aug. 7).
Forbes lists Harold Hamm, 68, as the 40th richest person in the world for 2014, with an estimated net worth of $18.2 billion. Sue Ann Hamm had held executive roles within the company.
Last year, Continental’s founder, the son of poor Oklahoma sharecroppers, was profiled in The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters, written by author Gregory Zuckerman (see Shale Daily, Nov. 7, 2013).