Harold Hamm and his ex-wife Sue Ann Arnall have just joined the unenviable ranks of the most expensive divorce settlements in U.S. history, after an Oklahoma court ordered Hamm to pay Arnall nearly a billion dollars as part of a divorce settlement following their 26-year marriage.
Hamm, a self-made Oklahoma oil magnate, is the majority shareholder and CEO of Continental Resources. Forbes credited Hamm with “fueling America’s recovery” and estimated his net worth at more than $18 billion dollars, making him the 24th richest man in the country. Hamm was also named as energy advisor for Mitt Romney’s 2012 presidential campaign.
In 1988, Harold Hamm married his second wife Sue Ann Arnall, a woman a decade his junior. Hamm’s first marriage to wife Judith Ann ended over allegations that he was having an affair with Sue Ann.
At the time, Arnall was a lawyer at Continental and 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 known as the Bakken formation. The Bakken turned out to be one of the richest underground oil reserves in the United States.
The secretive nine-week divorce trial focused largely on what exactly led Harold Hamm to discover the Bakken, thereby creating his enormous fortune. Was it shrewd skill and speculative expertise or just dumb luck as Hamm claimed?
Under Oklahoma law, investment growth during marriage can be part of a divorce settlement if made through “active forces” such as skill, work ethic or expertise. If, on the other hand, the growth is attributable to “passive forces”, such as changing economic conditions or circumstances beyond the parties’ control, then it is considered separate property.
In November 2014, the Oklahoma court found that Hamm’s skills, efforts and leadership, touted for years in Continental’s SEC filings, were responsible for the couples’ growth in marital fortune. However, the court estimated the couples’ marital estate at only $2 billion, not the $18 billion touted in Forbes. Certain assets, such as Orbit Gas Storage, were valued at zero in the ruling. See a full copy of the memorandum order here.
The court awarded Arnall half of the marital estate, including a $17.4 million ranch in Carmel Valley, CA and an equalization payment of nearly $1 billion in cash. However, Arnell plans to appeal the ruling, claiming the court considered only a fraction of the couples’ multi-billion dollar estate.
Hamm pledged nearly 20% of his Continental stock in order to quickly write a check that would stop interest from accruing during Arnall’s appeal. Arnall deposited the check in January 2015, but still plans to proceed with an appeal.
Hamm’s attorney claims that Arnall’s acceptance of the check ends her case, since she has “accepted the benefits of the ruling”. Arnall, however, argues that accepting the money on the table is the only intelligent thing to do while she awaits appeal.
Interviewed by People, Arnell said “The court’s rulings on Tuesday left me in a position where I would receive no distributions of the marital estate during the appeal, which could last numerous years, and would be required to ‘show need’ in order to obtain temporary support.”
She added, “I believe it is unfair that any woman’s property be controlled by a former husband. During our 26-year marriage, and during the nearly three years this case has been pending, Hamm has had complete control and full use of the assets we built together, while I have patiently waited for access. I was simply not willing to wait several more years while the appeal is pending.”
Lisa L. Fiance, Esq. is a California family law attorney, divorce mediator, and the owner of Epiphany ADR. The information contained in this article is intended as general information and does not constitute legal or tax advice.