September 24, 2014
Ilan Hirschfeld, Partner-in-Charge of the New Jersey Offices, Quoted in Reuters Article, "U.S. Oil Baron Rewrites His Company's History; Move Could Stave Off Record Divorce Payout."
By Joshua Schneyer and Brian Grow
CEO Harold Hamm faces paying billions to his estranged wife. Do revisions to his corporation’s website strengthen his hand?
The divorce trial of one of America’s wealthiest men, oil baron Harold Hamm, plays out mostly in secret here at the Oklahoma County Courthouse. For weeks, signs have been taped to the door of Courtroom 121. “CLOSED HEARING,” one reads. The other: “DO NOT ENTER.”
But an examination of the website of the company Hamm founded, Continental Resources Inc, reveals part of the billionaire’s legal strategy as he seeks to avoid what could be the largest divorce award in U.S. history.
Publicly traded Continental has been revising its corporate annals – in each case diminishing the company’s accomplishments under Hamm’s leadership or changing the dates of key achievements.
Downplaying his role in Continental’s success is central to Hamm’s chances of minimizing the financial blow from his divorce, lawyers say. According to state law, if Hamm can show that market conditions – rather than his management prowess – led to Continental’s financial success, he won’t have to share those gains with his estranged wife, Sue Ann. The two never signed a prenuptial agreement.
At stake in the divorce is the $17 billion piece of Continental owned by Harold Hamm through his 68 percent holding in the company’s publicly traded shares. Legal experts interviewed for this article said the changes on the website appear to be part of Hamm’s strategy.
The purpose, they say, is to persuade the judge that the surge in Continental’s share value has little to do with Harold’s deft management during his 26-year marriage to Sue Ann. Under Oklahoma law, if the growth of Continental was “passive” – that is, owing to market factors beyond Harold’s control rather than to his skill and effort – he won’t have to share those gains.
“The corporate website, along with public filings, are places we always look when a divorce case involves a business,” said Ilan Hirschfeld, head of the marital dissolution practice at accounting and advisory firm Marcum LLP. “Lawyers love to use the company’s own reports to prove their case that the growth in marital wealth has been active.”
“Very simply,” Hirschfeld said, “the company may be framing Mr. Hamm’s impact as less important than it had before.” Hirschfeld isn’t involved in the case.
Click here to read the full article on www.reuters.com >>