Posted on behalf of Jeffrey N. Greenblatt of Joseph, Greenwald & Laake, PA
People in Maryland may have seen a recent business news article about Harold Hamm, CEO of Midwestern oil giant Continental Resources, and his impending divorce. The anticipated divorce settlement may have serious reverberations that could impact shareholders. Divorce can become more complicated for public figures, but for the head of a major corporation with millions of public shares, the pressure can be unfathomable.
High asset divorce can be trying for any wealthy couple, who have their entire financial lives at stake and may stand to lose tremendous sums in personal and business assets. Furthermore, divorcing couples with high assets not only have to face the same emotional tribulations as anyone else going through a divorce, but also have to contend with the frustration of complex asset division.
In this case, Hamm could be forced to shift ownership or break up a portion of the company in order to satisfy his wife’s claims to their property. Hamm has a 68% ownership of Continental Resources, and if he is forced to liquidate or turn over a portion of these shares to his wife, the stock price could take a blow. It is likely that Hamm’s wife, who has also been an executive within the company, will be entitled to an equitable share of the business, which could mean a period of uncertainty for the corporation and its shareholders.
Stock prices can be extremely volatile, which makes valuation for purposes of property division very complex, especially when the couple’s asset division may be tied to this inexact figure. When it comes to complex asset division in a divorce, the difficulty often lies in how to negotiate an equitable split without unnecessarily jeopardizing or hindering business assets. However, both of the Hamms are likely to be striving for a divorce agreement that won’t interfere with the company’s profitability or send shareholders heading for the hills.
Source: CNBC, “Will the Hamms’ Divorce Pressure Continental’s Stock?” Robert Frank, March 22, 2013