When a businessperson who owns or holds a controlling interest in a business does through a divorce, the issues can be complex in the division of marital property. In many situations, determining the value of the business itself can be an issue. Under California law, if a person owned the business before the marriage, tracing the business assets can be an issue.
A recent story from the financial section involves a potentially contentious divorce proceeding involving a couple who are divorcing after nearly 25 years of marriage. News reports indicate that Sue Ann Hamm, a former lawyer for Continental Resources, filed for divorce in May 2012. Her estranged husband is the chief executive of Continental Resources and Forbes ranked him last year at 35 on the list of the 50 richest Americans.
Reuters reports that documents in the divorce proceeding are sealed, and it is not clear if any prenuptial agreement is involved in the family law proceedings. However, commentators say that it appears that division of marital property is a contentious issue. The oil baron and his estranged wife have been married for nearly 25 years, and each directly contributed to the company during the marriage, according to Reuters.
Legal analysts say that the total amount of money, potential control of the company and prior divorce filings are all converging to complicate the legal proceedings. Determining the dollar amount for the valuation of the business is not the issue (the shares are publicly traded). The real issue is the date of valuation. Each of the spouses has previously filed for divorce–Harold Hamm filed in 1998 and Sue Ann Hamm previously filed in 2005.
Each of the prior divorce petitions was later withdrawn, and the records from the 1998 proceeding reportedly were ordered destroyed earlier this year. However, Mr. Hamm reportedly claims that he and his estranged wife remained separated after the 2005 petition was filed, despite that fact that the petition was later withdrawn. He says that the two have lived separate lives since the fall of 2005.
Ms. Hamm reportedly disputes that assertion. She says that the two have lived together, filed taxes, worked together, traveled together and have done others things together since 2005. The divorce is being handled under Oklahoma law, and commentators say that the date of separation could be pivotal in determining what is included as marital property. A hearing is scheduled for May 20 on the issues of date of separation and date of valuation of the assets.
Analysts say that the marital property settlement could potentially be record breaking, involving a larger payout than was made in Rupert Murdoch’s 1999 divorce, where he reportedly paid his ex-wife $1.7 billion.
Source: Financial Post, “Looming divorce could threaten U.S. oil baron’s empire,” Brian Grow and Joshua Schneyer–Reuters, March 22, 2013