Oil Tycoon, Harold Hamm, Ordered To Pay Wife $1 Billion in Equitable Distribution

By Richard Geller

Harold Hamm, an Oklahoma oil tycoon and the 24th richest man in the United States, has been ordered to pay his wife $1 billion as part of one of the largest divorce settlements in history.  However, the Judge subsequently ruled that Hamm's ex-wife, Sue Ann Hamm, is not entitled to alimony (known as 'maintenance' or 'spousal support' in New York), as she failed to "demonstrate need for support above and beyond what she is receiving as her share of the marital estate."  

The $1 billion settlement arises from the 'equitable distribution' of marital assets that are apportioned by the court upon divorce. The biggest challenge underlying this case was determining whether the Bakken formation (one million acres of landed in North Dakota, Montana and parts of Canada owned by Harold Hamm) was separate or marital property. Throughout the couple's marriage, the Bakken formation eventually became the source of Harold Hamm's tremendous fortune.  

To clarify - property acquired by either spouse during the marriage is marital property (notwithstanding certain exclusions) and is subject to equitable distribution upon dissolution of marriage (aka: upon 'judgment of divorce'). Regardless of how title to the property in question is held; if it is marital property, it will be divided as such in divorce.

The main issue at the heart of the divorce was whether Mr. Hamm's fortune emanated from skill and expertise or a product of nothing but pure luck.  Under Oklahoma law, the answer can turn the entire case on its head.  

"The money a spouse earns while married can be part of a divorce settlement if it is made through skill. If, on the other hand, the increase is attributable to '“changing economic conditions, or circumstances beyond the parties’ control,”' as the state’s Supreme Court put it in a 1995 case, then that money is off the table.

Unfortunately for Mr. Hamm, Oklahoma County Judge Haralson didn't find the 'luck' argument convincing.  Judge Haralson held that Mr. Hamm's skills, efforts, expertise, and leadership resulted in an "increase in value" for Continental Resources, the company in which Mr. Hamm is chief executive and majority shareholder.  

The judgment orders Mr. Hamm to make about $320 million in payments (1/3 of the settlement) to his now former wife before the end of 2014.  The remainder must be paid in roughly $7 million/month installments thereafter. Although there is no concern that Mr. Hamm will fail to make the ordered payments,  the Court has nevertheless placed a lien on 20 million shares of Continental Resources stock (though Mr. Hamm comfortably owns more than 6 times that number of shares). 

Although much of the divorce matter has been confidential and filed under seal, a 2013 filing by Ms. Hamm makes allegations of longstanding marital infidelity.  To bolster her claims, Ms. Hamm states that she documented the extramarital affairs via audio and videotape. In a clever response, Mr. Hamm's lawyers used those tapes to substantiate claims that the couple had not lived together as husband and wife for a very long time. 

Contact Geller Law PLLC today for your free consultation on Divorce, Equitable Distribution, Maintenance. 

The Third Party in a Divorce: Helping Children Cope

Sad Child.jpg

By: Richard Geller

Divorce and separation can weigh heavily on a couple.  Whether the divorce was a long time coming or a complete surprise to one of the partners - its rare that the individuals involved don't require a coping mechanism to deal with and absorb the huge emotional toll.  

When children are involved, however, they are subjected to the worst of it.  Innocently stuck in the middle - watching their parents fight and stress over the division of marital assets and property, child custody and visitation rights.  No matter how civil the parting can be, it's difficult for many children to cope with the ongoing court proceedings, the break-up of their home and the time they are 'permitted' to spend with each parent. 

There's no definitive way of helping a child take on the psychological effects of a parents divorce. But the internet definitely tries their best to help.  Helpguide.org provides an extensive how-to guide on Children & Divorce.  Most of the tips are a highlight of the most obvious 'how-to's', but it's easy to forget some (if not most) of the basics during a distressing period of your life.  Tell the truth, don't argue in their presence and no displacement of anger is just some of the things that may seem incredibly obvious, but certainly have a tendency to be thrown away when we're in red alert.  

Besides other standard guides easily found on the internet, I came across an interesting post by Maria Herenandez-Tuten, on Babble.com.   Maria, inspired by her past tenure as a school counselor, published a blog post titled, "10 Books to Help Kids Cope With Divorce."  She goes over 10 popular books that target children of various ages in their quest to cope with the effects of their parents divorce.  It may not always be easy for a parent to relate to a child, particularly if they are the reason that the child is upset (even if that parent was 'unwilling to divorce' party in the action).  Historically, books have always been a brilliantly useful outlet that allowed children to mentally transport to another place and keep themselves busy.  I know it was one of my all-time favorites as kid.  

If your divorce has a child or children caught in the middle, just remember that they're a party to this to divorce, too.  Check in with them and keep the argument out of their peripheral sight and sound.  Keep their minds occupied and tell them the truth - but break it to them gently and without blame.  

Contact Geller Law PLLC today for your free consultation on Custody & Visitation.


Pups Caught In The Middle: Dogs & Divorce

By: Richard Geller 

If you're a pet owner like me, the attachment you feel to your pet is immeasurable.  Our dog has been with us for less than a year, but I can't imagine what it would be like without her.  This country's love for cats and dogs seems to only be increasing.  The Humane Society of the United States estimates that there are "nearly 179 million cats and dogs living in U.S. homes." Although that figure does not represent the number of married couples that jointly own a pet, the figure representing that pool is also growing substantially (so much so, that the pope is getting concerned). 

Unfortunately, the increase in pet ownership in a married home is joined by a proportionately increasing issue: custody of the pet in the event of a divorce or separation.  Although a study by the American Veterinary Medical Association states that in 2011, 6 out of every 10 pet owners "considered their pets to be family members," the law in New York has always regarded household pets as property; albeit a "special category of property" (see respectively, Fowler v. Ticonderoga, 131 A.D.2d 919 (1987); and Hennet v. Allan, 43 Misc 3d 542 (2014)). 

Currently, the only law in New York taking a divergent stance on the matter is the Family Court Act §842, which allows pets to be included as protected family members in orders of protection.  Otherwise, disputes between parties regarding the ownership, custody, or possession of a companion pet have been left to the utilization of replevin - the same recourse used for any other piece of property or chattel.   

Although the New York Legislature has yet to change their position on the matter, there's recently been a bit of a jurisprudential shift.  Late last year, in the case of Travis v MurrayJudge Cooper of the Supreme Court of New York County presided over the divorce of a New York lesbian couple disputing over the custody of their 2 1/2 year old miniature dachshund, Joey.  In a surprise decision, Judge Cooper ordered a full one-day hearing to determine "who gets Joey."  Though the Judge set the application of a sympathetic "best for all concerned" standard to be used in the Court's final determination, he stated that the decision would mean that "whichever spouse is awarded Joey will have sole possession of him to the complete exclusion of the other." Subsequently, Judge Cooper acknowledged that the end result (i.e., preclusion of visitation or joint custody) would be a harsh one for the losing party. He subsequently justified his decision by reasoning that:

[...] our judicial system cannot extend to dog owners the same time and resources that parents are entitled to in child custody proceedings.  The extension of an award of possession of a dog to include visitation or joint custody - components of child custody designed to keep both parents firmly involved in the child's life - would only serve as an invitation for endless post-divorce litigation, keeping the parties needlessly tied to one another and to the court."

In the end, though Judge Cooper asserts that the law should humanize the view on pet custody, he doesn't believe it can be stretched so far as likening it to the standards and formulas set forth for child custody.  

Accordingly, given the Court's stern "winner takes all" stance, it is in the best interest of every pet-owning couple, married or almost-married - to set up a safety net protecting their interests should the relationship take an unexpected turn for the worst.  The best way to do so is with the drafting of a prenuptial or postnuptial agreement.

 A prenuptial or postnuptial agreement is an agreement made between a couple that outlines the order of things should they separate or divorce.  Some of those terms include the allocation of property and assets, determination of spousal support, etc.  Provided that the Court will ultimately seek to award only one party with sole custody of the dog, there has been a trend in drafting what some are calling "pre-pups" - provisions set within prenups or postnups that outline the couples custody and visitation rights regarding their pet companions.  

Though it has yet to be determined whether the Court would enforce such a provision (provided that the couple does not amicably concede with the set terms of this agreement), it is ultimately a safer option to have one, rather than presenting the court with a pair of empty hands.  If for nothing else, the effort of trying to maintain custody of your dog in an agreement may help substantiate one of the factors put forth by Judge Cooper in his analysis: a showing of why the dog would have a "better chance of living, prospering, loving and being loved in the care of one spouse as opposed to the other." 

Contact Geller Law PLLC today for your free consultation on Prenuptial, Postnuptial or "Pre-Pup" Agreements