Divorce trial of Continental CEO ends, with billions at stake

[October 10, 2014]  (Reuters) - Thursday marked the end of the epic nine-week divorce trial of Oklahoma’s richest man, oil magnate and Continental Resources Chief Executive Harold Hamm. With billions of dollars of company wealth at stake, the unusually secretive trial could end with the largest divorce judgment in history.

During the proceedings, lawyers for Harold Hamm and his wife of 26 years, Sue Ann Hamm, presented starkly different views of how much wealth should be divided by the court. The money is mostly tied up in a 68 percent stake in Continental, whose shares are in Harold's name.

Expert witnesses for Sue Ann Hamm, a former attorney at Continental, pressed the court to divide as much as $17 billion in wealth that has accrued in Harold's shares of the company since 1988, when she married Harold.

Such a multibillion-dollar award could force Harold Hamm to liquidate a significant portion of his Continental shares, eroding his control of one of America’s fastest-growing energy companies. Continental is a leading driller in the Bakken oilfield of North Dakota and Montana.

Harold’s side contends his wife deserves almost none of it. According to a filing in the case, his position was that “virtually all of CLR’s (Continental's) appreciation is the result of passive factors,” which under Oklahoma law means he should get to keep the wealth.
 

Harold, widely regarded as one of the most successful CEOs in the current U.S. shale-drilling boom, has argued that his "active" contributions to Continental's growing wealth during the marriage have been minimal.

If Oklahoma County Judge Howard Haralson agrees with Harold’s argument that Continental's wealth accrued through factors beyond his control, such as rising oil prices, he may not have to share the wealth with Sue Ann.

Whether the judge will buy that is uncertain, given the importance Harold's own company has attributed to him in the past: In one example, Continental's public relations staff wrote that “Harold’s vision has led Continental to become a first mover in the oil and gas industry,” according to a court filing.

The Oklahoma oil company has taken unusual measures that may have helped Harold play down his role. Last month, Reuters reported that Continental had rewritten its corporate history on the firm’s website, striking references to the company being first to discover a major oilfield or to deploy new technology, and moving dates for company decisions that proved highly lucrative, to before the couple wed.

Judge Haralson must now pour over thousands of pieces of evidence and deliver a judgment in the case that a court filing described as “matrimonial litigation of unprecedented scope and complexity.”

Most filings and hearings in the case have been kept closed. Haralson said on the trial's opening day that he was worried public disclosure of Continental's confidential information ran the risk of “destroying” the company.

On Wednesday, Reuters filed a motion to open the courtroom and unseal the transcripts, citing the public’s First Amendment rights to attend public hearings.

(Reporting By Joshua Schneyer; Editing by Steve Orlofsky)

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