Continental Resources Founder’s Stake at Risk in Divorce

Photographer: Scott Eells/Bloomberg

Billionaire Harold Hamm is the 44th richest person in the world and has a net worth of $17.5 billion, according to the Bloomberg Billionaires Index. Close

Billionaire Harold Hamm is the 44th richest person in the world and has a net worth of... Read More

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Photographer: Scott Eells/Bloomberg

Billionaire Harold Hamm is the 44th richest person in the world and has a net worth of $17.5 billion, according to the Bloomberg Billionaires Index.

Billionaire Harold Hamm’s controlling stake in Continental Resources Inc. (CLR) is at risk in his pending divorce after a judge ruled the value of the stock’s appreciation during his 26-year marriage may still be divided as a marital asset.

In rulings issued Feb. 13 and made public this month, Oklahoma district court judge Howard Haralson said that the “marital portion of non-passive enhanced value” of 125 million shares of Continental stock owned by Harold Hamm “is reserved for further determination.”

Haralson issued a partial summary judgment in a motion filed by Harold Hamm, 69, to declare the stock a premarital asset.

“The court is essentially saying we’re not going to require him to divide those shares,” Ron B. Barber, an attorney for Sue Ann Hamm, said by phone. “That does not limit in any way the court’s duty to make an equitable division of what is called the enhanced value.”

Hamm is the 44th richest person in the world and has a net worth of $17.5 billion, according to the Bloomberg Billionaires Index. The couple don’t have a pre- or post-nuptial agreement, according to Barber.

“The court’s order speaks for itself,” Eric S. Eissenstat, general counsel for Continental Resources, said in an e-mail.

Craig L. Box, an attorney for Harold Hamm, declined to comment.

‘Marital Effort’

Harold and Sue Ann Hamm were married in 1988. The couple filed for divorce in 2012 and a trial is scheduled for July 14. The judge’s ruling that the stock was a premarital asset means the value of shares at the time of marriage won’t be considered joint assets under Oklahoma law. That still leaves billions of dollars worth of appreciation to be determined, according to William LaSorsa, 68, a civil litigation attorney and partner at Jones Gotcher in Tulsa, Oklahoma.

“If the increase in value is attributable to marital effort by either party to make it grow, as opposed to market conditions, then the increase may be considered a marital asset and divisible by the court,” LaSorsa said.

Continental is the largest oil leaseholder in the U.S. Bakken shale region. The company had revenue of $22.1 million in 1993, the earliest year that data is publicly available. It had $3.5 billion in sales last year.

The Oklahoma City-based company sold shares in an initial public offering in 2007 at $15. At today’s closing price of $120.46, Hamm’s original 66 percent stake is $13.2 billion more valuable since the IPO.

‘Tricky Concept’

“The shareholders should take comfort in the fact that there is not going to be a disturbance in the management of the company going forward,” Hamm told Forbes.com in a March 4 interview.

It’s possible the judge could award Sue Ann Hamm Continental shares because they would be easy to sell in the public market, LaSorsa said. “It’s not clear cut.”

In the trial, the judge will determine how much of Continental’s gains were due to market conditions and how much to Harold Hamm’s efforts. Gains credited to the market probably wouldn’t be included among divisible assets, Shari A. Levitan, an attorney and head of the private wealth services practice for New England at law firm Holland & Knight LLP, said in a telephone interview from her Boston office.

“That can be a very tricky concept to apply because maybe it’s a little of both,” Levitan said. “How do you value those different concepts? Each side will have at least one expert opining about all of that, I have no doubt.”

Record Divorce

Hamm would have to transfer or sell $4 billion in stock for him to lose his controlling stake in the company.

Given the size of the fortune and the lack of pre- and post-nuptial agreements, it’s possible Hamm’s divorce could become one of the largest publicly known divorce settlements, according to Levitan. The largest is said to be for $1 billion, between Formula One Management Ltd chief executive Bernie Ecclestone and his wife Slavica, according to an interview Ecclestone gave in 2010 to the Daily Mail newspaper.

Barber, Sue Ann Hamm’s attorney, declined to comment further on the case.

“We don’t want the court to feel like we’re taking this matter out to the media, it’s not good for either party,” he said.

To contact the reporter on this story: Brendan Coffey in Boston at bcoffey10@bloomberg.net

To contact the editors responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net Peter Newcomb

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