Let’s face it, there are not many divorce settlements that land the divorcee instantly in the list of the richest people in America. But that’s what is happening with the divorce deal done between Oklahoma oil man Harold Hamm and his former wife, who is now set to pocket close to $1 billion.
Your read it correctly.
One billion dollars – the biggest divorce settlement in US history.
Mind you, Mr Hamm is used to big deals. Forbes calculate his wealth at circa $18 billion, placing him at position 24 on the nation’s rich list.
As the NY Times reports, he owns the largest piece of the greatest oil discovery of our age, in the shale-rich plains of North Dakota.
Now another superlative can be added to Mr. Hamm’s outsize career: He is paying one of the biggest divorce settlements in history.
After a secretive, nine-week trial, a judge in Oklahoma City has ruled that the 68-year-old Mr. Hamm must pay nearly $1 billion to his ex-wife, Sue Ann Hamm. With the bang of a gavel, Ms. Hamm has joined the ranks of the wealthiest women in the United States.
Or rather, she will join those ranks over time. The judgment requires Mr. Hamm to pay his ex-wife about $320 million, or one-third of the total settlement, by the end of 2014. The rest is to be paid in chunks of at least $7 million a month. For a little perspective, that figure is slightly larger than last year’s salary of the chief executive of U.S. Steel.
The settlement looks economy-class compared with the $4.8 billion that the Russian oligarch and “fertilizer king” Dmitry Rybolovlev paid his ex-wife, Elena, this year. But the payment is large enough that the presiding judge in the case, Howard Haralson, placed a lien on 20 million shares — or more than $ 1 billion — of Mr. Hamm’s Continental stock.
Mr. Hamm, who has described himself as “more hardheaded than other people,” did not have a particular document that is all but standard now whenever tycoons wed: a prenuptial agreement. Barring future fiascos, this will surely stand as the costliest decision of Mr. Hamm’s life. He has already paid his ex-wife roughly $25 million since the case was filed in 2012, the ruling stated.
Messages left with Continental Resources and with a lawyer for Ms. Hamm were not returned.
Harold Hamm was just another middle-age multimillionaire when he married Sue Ann Hamm, his second wife and a woman a decade his junior, in 1988. At the time, Ms. Hamm was a lawyer at Continental and Mr. Hamm was just beginning to snap up roughly one million acres of land leases in North Dakota, Montana and parts of Canada in what is the Bakken formation.
The Bakken turned out to be a rich underground trove. The question at the center of the divorce trial was what exactly led Mr. Hamm to it and his epochal fortune — expertise or dumb luck?
Under Oklahoma law, the answer matters. The money a spouse earns while married can be part of a divorce settlement if it is made through skill. If, on the other hand, the increase is attributable to “changing economic conditions, or circumstances beyond the parties’ control,” as the state’s Supreme Court put it in a 1995 case, then that money is off the table.
The law put Mr. Hamm and his lawyers in an odd spot. They had to argue that one of the country’s singular entrepreneurs, an up-from-nothing wildcatter, had essentially stumbled into his billions. This seemed like a tough sell. Mr. Hamm was once quoted as saying that “My biggest advantage is that I was born with no advantage.”
As Mr. Hamm sought to poor-mouth his prowess, his company followed suit. Continental’s proxy filings with the Securities and Exchange Commission for years have praised Mr. Hamm for “his leadership and business judgment.” Not anymore. As Reuters wrote in September, that phrase was excised in the company’s most recent proxy, along with a reference to Mr. Hamm as “one of the driving forces” behind Continental.
Judge Haralson did not seem to buy this just-lucky account of Mr. Hamm’s accomplishments. In arriving at the settlement terms, the judge cited Mr. Hamm’s “skills and efforts” and said his leadership spurred an “increase in value for Continental.” He also called Mr. Hamm “an expert in the oil field service business” and even after this ruling, Mr. Hamm remains one of the richest. As a fraction of his net worth, the settlement leaves him with many billions to spare.