Cordell & Cordell Principal Partner Joe Cordell recently spoke with Forbes.com’s Robert Pagliarini on Sudden Wealth Radio about the recent divorce of billionaire Harold Hamm.
Mr. Cordell touched on a number of aspects about the case, which is shaping up to be one of the largest divorce settlements in United States history. Most notably, he pointed out the odd position its placed each side of the table in the divorce.
Mr. Hamm, who despite having essentially no education, acquired Continental Resources in 1967. When he married his now divorced spouse Sue Ann, the company was worth approximately $50 million. The company eventually appreciated in value to $18 billion.
A judge initially awarded Ms. Hamm, which is now Ms. Arnall, $1.4 billion, which she rejected.
The point of contention in the case is whether the appreciation in Continental’s value should be considered a marital or separate asset. The law in Oklahoma, and many other states, considers property owned before marriage separate property. But if that property appreciates in value due to the owner’s hard work, then the appreciation is considered marital.
Mr. Hamm is in the unique position of arguing that his company’s gain in value was due essentially to luck. On the other side, his former spouse is making the case that her ex-husband is a savvy and skilled businessman who built this multibillion-dollar company from the ground up.
Mr. Cordell also described how the case has drawn attention to the importance of getting a prenuptial agreement, especially if you own considerable stock in a corporation.
“Prenuptial agreements speak not only to the incidence of divorce, but also to the incidence of death,” Mr. Cordell said. “If there is a closely held business, it is critical that there be buy/sell agreements that are incorporated into that planning process.”
Click here to listen to the full interview.