In late 2014 (remember 2014?), oil tycoon Harold Hamm called a divorce settlement that awarded his ex-wife about $1 billion “equitable and fair.” But his tune changed in a matter of weeks, Reuters reported, as the price of oil — and the sum of his fortunes — fell dramatically.
Now, Hamm will challenge that settlement in Oklahoma’s Supreme Court, arguing that his ex-wife is getting a substantially larger portion of his fortune than what he agreed was fair.
For her part, Hamm’s ex-wife, Sue Ann Arnall, is also appealing the settlement, arguing that the courts awarded Hamm too much of the fortune amassed during their marriage. The state’s high court will hear both appeals.
The news, first reported by Reuters, is just the latest twist in the years-long divorce proceedings. So for those who would like to catch up and follow along as two incredibly rich people argue over who needs and deserves how many billions of dollars more than the other, we present a guide to one of the most expensive divorce cases in history.
Hamm, 69, is the CEO and founder of Continental Resources. He’s considered by many to be a pioneering figure in America’s recent oil boom — particularly when it comes to fracking. Continental Resources is one of the largest oil producers in North Dakota’s Bakken formation. All this has made him a billionaire.
In August, in fact, he was worth $19 billion. Except, as Reuters notes, his fortune has fallen with dropping oil prices, and is now worth as little as half that amount. A large portion of his fortune is bundled up in his 68 percent share of Continental stock. All told, he’s still worth about $10 billion today.
Hamm, who describes himself as a “nature lover,” is often at odds with environmentalists, both for his line of business and for his outspoken opposition to anti-fracking and carbon emissions campaigns. In 2013, Hamm told NBC News: “Some of the extremists are calling it carbon pollution. I mean, all of us breathe out carbon dioxide. Are we going to quit breathing?”
Also of note: Hamm was the energy adviser for Mitt Romney’s 2012 presidential campaign.
For 26 years, Hamm was married to Sue Ann Arnall.
Arnall, who until recently used the last name Hamm, is a former executive for Continental. And, she’s an attorney. But recently, most people who recognize her name probably do from coverage of her pushback against the original divorce settlement.
She is also, more or less, a billionaire — unless Harold Hamm manages to get the reduction in the settlement he’s asking for. As part of the settlement, Arnall gets $995.5 million, plus several pieces of property and assets worth several million dollars more.
Arnall did not sign a prenuptial agreement when she married Hamm. The pair have adult children together.
Ha ha! Not yet. There’s Russian oligarch Dmitry Rybolovlev’s famous $4.5 billion settlement, for example. But it’s up there. However, Hamm’s divorce prompted a lot of speculation for its potential to overtake the oligarch’s payout: Forbes, for example, guessed that Hamm could lose more than $5 billion of his fortune to Arnall.
GOOD QUESTION. Legally, Reuters reported in 2013, the couple separated on May 18, 2012. But in previous court documents, Hamm wanted the date of separation to be much earlier — in 2003. Had he gotten his wish, none of the wealth he accrued after that date would be game for the divorce agreement. Continental, which went public in 2007, has grown substantially since 2003.
The Hamms appeared publicly together as late as May 2012, during a dinner they hosted for Romney. But this was all before the divorce proceedings became public knowledge. As Reuters noted, the papers were originally filed under “Jane Doe v. John Doe.” An acknowledgement from Continental that Hamm was in the middle of a divorce caused a 3 percent drop in its stock prices.
For one thing, the former couple keeps doing things like contesting divorce settlements they agreed to weeks ago. But there’s another matter: The way that Oklahoma law governs the splitting of assets (we’ll get to that) meant that Arnall was able to subpoena vast amounts of evidence of Hamm’s business practices in order to determine how much of their fortune could be split in the divorce.
According to The Wall Street Journal, Arnall asked for more than 600,000 pages of documents from Continental to detail Hamm’s skill at business. Former Continental execs were subpoenaed for the same reason.
“Oil tycoon’s ex-wife calls her record $1BILLION divorce payout ‘not fair’ and asks for more money as she takes ownership of their $15m California ranch,” reads one headline on the case. Another, quoting a statement from one of Hamm’s attorneys, reads: “Oil’s plunge has decimated Harold Hamm’s fortune and now his ex-wife wants $300-million by Wednesday ‘just to get by.'”
Most of the divorce proceedings were conducted behind closed doors, but we still know that’s not quite Arnall’s argument. You see, under Oklahoma law, couples split wealth gained from the active effort or talents of either person in the couple. If the wealth is gained passively — i.e., if Hamm successfully argues that he simply got lucky by owning stock in his company and became a billionaire — then it doesn’t have to be split. That’s why Arnall was asking for all those documents, to show how good her ex is at the business of making money.
Reuters also has some interesting details on another aspect of the case: Arnall’s own role in the success of the company, and how Continental presented that role before and after the divorce. For example:
“In their divorce battle, Hamm has sought to tweak the historical record in his favor. Reuters reported in September that Continental had altered its corporate timeline on the company’s website, and made changes to language in SEC filings, in ways that could benefit Hamm’s case. The revised timeline was largely accepted by the court. It included claims that important milestones, such as Continental’s lucrative shift in focus from natural gasto oil, came years before the marriage began
In August, under questioning from Arnall’s attorney, Hamm testified that several statements on Continental’s web site had been incorrect and that he had only recently discovered the errors.”
Hamm did something kind of unusual in his appeal of the settlement: He submitted evidence not considered during the trial, which ended in October, pertaining to the dramatic drop in oil prices (and his company’s stock) since the agreement was reached.
According to Reuters, Hamm’s appeal challenges much of Arnall’s cash award, along with 26 other investments split in the divorce. He’s already getting a small break from the terms of the judge’s decision: a $300 million payment scheduled to be awarded by the beginning of 2015 is delayed until after a Jan. 6 hearing on the appeals.