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On Monday November 10, 2014, Sue Ann Hamm, the ex-wife of Oklahoma oil tycoon Harold Hamm, was awarded more than $1 billion dollars as part of a divorce award. As part of the judgment, Harold was ordered to pay his ex-wife $995 million, plus their California ranch and their Oklahoma home, worth tens of millions more. The divorce judgment is one of the largest in U.S. history. On the Thursday after the decision, Sue Ann’s attorney announced that they will be filing an appeal.
Prior to the marriage, Harold founded Continental Resources, a large oil company, in 1967. He married Sue Ann approximately 20 years later. During part of the marriage, Sue Ann, a lawyer and economist, worked at Continental as an executive in charge of the crude marketing division. At other times, she worked at home, raising the couple’s two children. Since Harold started the company in 1967, its value has grown exponentially and is now estimated to be worth over $18 million. Harold is now the CEO of the company and owns more than 68% of Continental’s stock.
Judge Howard Haralson, who was presiding over the Hamm case, ruled that $1.4 billion of the growth in Harold’s Continental shares during the marriage was marital property to be split with Sue Ann. The rest was awarded to Harold as his separate property. Sue Ann argues that the decision is “not equitable” in that it grossly undervalues the marital wealth she is entitled to.
In order to understand this decision, it is important to consider how a judge divides property upon divorce. Put simply, property can be classified as either separate or marital. Separate property includes things acquired before the marriage, things inherited from family members, gifts from third parties, personal injury awards, etc. All other property or assets that were acquired during the marriage, are considered marital property.
However under some circumstances, separate property can become marital property. As seen in this case, when separate property increases in value during the marriage, it can become marital. In determining if the property has become marital, it is essential to determine if the appreciation is active or passive. Passive appreciation is caused by factors outside the parties’ control, such as market conditions, whereas active appreciation occurs when property value grows due to the efforts or skills of either spouse during the marriage.
In this case, Judge Haralson ruled that although Continental’s value soared by around 400-fold, only $1.4 billion of that increase was due to the active efforts of the parties. He determined that the additional growth in value was due to passive or market factors, such as rising oil prices and new drilling technologies. In addition, some of the growth is attributed to the teamwork of other employees of Continental. Thus Sue Ann is only entitled to split the $1.4 billion.
In response, Sue Ann and her attorneys argue that Harold should be given more credit for his large role in the company’s “dazzling” growth. In addition, during the 26 year marriage, she not only raised their kids and took care of the household, but was also held an important role as the executive of the crude marketing division. According to Sue Ann, allowing Harold to keep approximately 94% of the estimated $18 billion rise in his Continental share is simply unfair.
Are you considering filing for divorce but concerned about your finances and how they will be divided? You do not need to go through this alone. If you have specific questions regarding your divorce proceedings, want to ensure that you take the necessary time to properly address all of your issues and concerns, and would like to speak to a respected and experienced Long Island Divorce Attorney, contact the offices of Jay D. Raxenberg. Call (516) 491-0565 or toll free at (888) 543-4867.