Continental Resources (CLR.N) Chief Executive Officer Harold Hamm has been ordered to pay nearly $1 billion to his ex-wife in one of the largest-ever U.S. divorce judgments, according to a court filing on Monday.
In an 80-page ruling following a more than nine-week divorce trial that ended last month, Oklahoma Special Judge Howard Haralson ruled that oil magnate Hamm should pay his ex-wife a total of $995.5 million.
Although the award could make Sue Ann Hamm, 58, one of the 100 wealthiest women in the United States, according to Forbes' rankings, it is far smaller than the amount her lawyers sought and does not require Harold Hamm to sell shares of Continental.
He holds 68 percent of the firm's shares. During the trial, Sue Ann Hamm's lawyers had asked Haralson to split a marital estate they estimated to be worth at least $17 billion, tied up in Continental shares.
Judge Haralson's ruling is subject to appeal, but if accepted by both parties it would allow Continental's CEO to put a contentious and time-consuming divorce behind him and to remain the controlling shareholder of one of America's most successful oil companies.
"As Continental has stated on numerous previous occasions, this private matter has not, and will not have any impact or effect on the Company’s business or operations," Continental said in a statement.
Through her lawyers, Sue Ann Hamm declined comment. Her legal team said it would be "evaluating Ms. Hamm's options."
Following news of the judgment, Continental shares fell 1.6 percent to $54.22 per share. The shares have lost around 30 percent since July 1, in step with tumbling world oil prices.
Harold Hamm's Continental stake is now worth around $13.9 billion, down from more than $18 billion before the trial began.
Oklahoma City-based Continental is a leading driller in the Bakken Shale play of North Dakota and Montana, the largest U.S. oil discovery in decades. Through his stake in Continental, Harold Hamm is believed to own more oil underground than any other American.
The Hamms wed in 1988 and had no prenuptial agreement. For years, Sue Ann Hamm was also an executive at Continental.
Some of the largest-ever U.S. divorce settlements have been kept private, but the Hamm judgment is among the biggest on record.
In a 2010 divorce settlement, casino magnate Steve Wynn agreed to transfer 11 million shares in Wynn Resorts, then worth $741 million, to his ex-wife Elaine, according to filings with the U.S. Securities and Exchange Commission.
To secure the judgment, Judge Haralson placed a lien on 20 million shares of Continental stock. That decision does not require Hamm to sell shares.
Judge Haralson ordered Hamm, 68, to pay his ex-wife about one-third of the funds, or $322.7 million, by the end of 2014, the filing says.
Hamm will be required to pay the rest of the judgment, or $650 million, in installments worth at least $7 million per month, according to the filing. Sue Ann Hamm has already been awarded around $25 million from the marital estate since the case was filed in 2012, the court said.
Haralson's ruling may come as a relief to some of Continental's other shareholders, who had worried that a multi-billion dollar award could force Hamm to sell a major chunk of the company quickly, potentially depressing the value of the shares or eroding his control of the firm.
"With this rather small settlement, it just removes some of the uncertainty," said Mike Breard, analyst with Hodges Capital Management in Dallas. "And there's already enough uncertainty around energy stocks right now with the oil price drop."
At stake in the case was how much of Continental's rising value could be attributed to the role played by the CEO.
Under Oklahoma law, the enhancement of wealth that comes as a result of the efforts, skills or funds of either spouse is subject to "equitable distribution."
Over the 26-year marriage, the value of Continental soared some 400-fold. During the trial, Harold Hamm's legal team contended that Continental's growing wealth was mostly due to passive or market factors such as the rising price of oil.
Seeking a larger judgment, Sue Ann Hamm's lawyers called expert witnesses to show that Continental grew because of Harold Hamm's deft management decisions.
Judge Haralson found that Harold Hamm played a central role in his company, but he did not agree with the massive dollar values that Sue Ann's expert witnesses placed on the CEO's contributions to Continental's weatlh.
For instance, Haralson wrote that the experts had not established exactly how much value was attributed solely to Harold Hamm and not to other managers at Continental, and that passive factors like oil prices and new technologies helped to propel the firm's value.
Among the assets that will go to Sue Ann Hamm, according to Haralson's judgment, are the couple's $17.5 million ranch in Carmel, California, and a home worth $4.7 million in Oklahoma City.
The judge's full ruling can be found at: bit.ly/10NBFl9
(Additional reporting by Brian Grow in Atlanta and Terry Wade in Houston; Editing by Dan Grebler and Andrew Hay)