RPR&C In The Media

December 5, 2014

Ex-Wife of Continental Chief Wants More than $972 Million

By Laurel Brubaker Calkins

Oklahoma oil billionaire Harold Hamm’s ex-wife says her almost-$1 billion divorce award isn’t enough, and that the judge is to blame.

Sue Ann Arnall appealed an Oklahoma court’s divorce decree, arguing the quarter century she spent with Hamm as he built a shale-oil fortune entitles her to more than the $972 million she was awarded by a judge, who she claimed made unsupported rulings in the 10-week divorce trial.

Divorce attorneys expressed surprise after the ruling that a billionaire’s spouse didn’t get as much as 30 percent of the couple’s assets when the marriage was dissolved last month. A stake that size could’ve been worth as much as $5.1 billion, said Seymour J. Reisman, a New York divorce specialist.

Instead, the ex-wife of the Continental Resources Inc. (CLR) chairman got much less, and none of Hamm’s 68 percent ownership of the company. Hamm, 68, is worth $10.7 billion, according to the Bloomberg Billionaires Index.

“As Sue Ann has stated previously, 6 percent is not a fair proportion of the wealth the couple accumulated during their marriage,” Ron Barber, her lawyer, said today in an e-mail.

The court ruling was a victory for Hamm, who was allowed to retain control of the company in part because witnesses testified he was the driving force behind Continental, with one calling him the “captain of the ship.”

Appeal

In her appeal, Arnall zeroed in on the judge’s decision to give Hamm all of their Continental stock, along with most of the increase in value the shares experienced while they were married. Hamm also got the bulk of their other investments.

The Oklahoma City judge didn’t explain how he reached those decisions, she complained in a petition filed today.

Arnall also faulted the judge for not explaining how he calculated her “contribution to the marital estate in her roles as a wife, mother and public supporter of her prominent husband.”

The judge, Harold Haralson, said in the decree that the husband was entitled to $1.9 billion more of the marital assets than the wife. Arnall also said the judge overvalued the ranch she received in California’s Carmel Valley by $400,000, and that she was wrongly given the couple’s $800,000 house in Enid, Oklahoma.

Both sides agreed Hamm would get that property, which has been under his “exclusive control” for more than two years, according to the petition.

Settlement

In the divorce settlement, Arnall was awarded the family’s $4.7 million home in Nichols Hills, Oklahoma, along with the Carmel ranch and all its livestock -– except for a pair of horses named “Star” and “Uno.”

Hamm, who helped develop the use of sideways drilling and hydraulic fracturing, was an early proponent of the Bakken oil-shale field. Continental is now the biggest Bakken operator, with a 1.2 million acre leasehold that exceeds even that of ExxonMobil Corp., the world’s largest energy producer by market value.

Hamm was worth $16.1 billion at the time of the decision. Continental shares have slipped along with global oil prices from $54.92 a share on Nov. 11 to $38.32 today. His fortune has dropped since the ruling due to oil’s decline and a lien the judge placed on 20 million of Hamm’s Continental shares as collateral for the divorce payout.

$10 Million Jet

Hamm got the couple’s $750,000 home in Branson, Missouri, a $10 million jet and a collection of shotguns, hand tools, books and family photos he requested.

The bulk of Arnall’s settlement consists of a $323 million lump sum payment due by the end of the month, followed by $7 million a month until the balance is paid in full, according to the court ruling.

Hamm’s lawyer, Michael Burrage, previously said the oilman wouldn’t have to liquidate any assets in order to pay his ex-wife. Burrage didn’t return a call seeking comment on the appeal.

The judge awarded the bulk of the Continental shares and value to Hamm because he found the company was Hamm’s before the marriage, the lawyer said last month.

Arnall sued for divorce in 2012, and the couple stipulated to a “state of mutual irreconcilable incompatibility” the following year. They required a 10-week trial to sort out their financial differences.

The case is Hamm v. Hamm, FD-2012-2048, District Court of Oklahoma County, Oklahoma (Oklahoma City).