When the wealthy divorce, the largest asset is often a business. Buffalo Law Journal reports this was the case in a recent high-profile ruling that will result in an approximately billion-dollar settlement paid by Harold Hamm to his ex-wife, Sue Ann Hamm. Mr. Hamm is an Oklahoma oil-and-gas entrepreneur ranked by Forbes magazine as the 30th richest person in the world. Ms. Hamm claims this isn’t a fair share and has appealed.
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So what is a fair share?
Buffalo matrimonial litigation attorney Patrick O’Reilly notes that business assets in divorce are “treated differently than such assets as houses, bank accounts, investments, retirement funds and real estate. Taking the business out of the equation, if it’s a marriage of any length, the court tends to start with a 50/50 division of the traditional assets.”
“When determining how to divide a business, the ebb and flow of the value must be determined,” Mr. O’Reilly said. “If it isn’t a publicly traded corporation, the value can be more difficult to determine, and experts will provide a variety of numbers.”
“In more recent cases,” said Mr. O’Reilly, “the non-participating partner gets a share ranging from 35 percent to 40 percent. At trial, 30 percent shows up often.”
He noted that when the wealthy divorce, “it often comes down to the question of how much is enough.”
Cash versus the business
Mr. O’Reilly pointed out about dividing business assets in divorce that the non-business partner usually gets “the cold, hard cash,” and the business owner retains more in value because he or she gets to keep the company.
“The argument usually is, first, what’s the business worth, and second, how much should the non-business spouse get of that value,” Mr. O’Reilly said. “It’s generally less than 50/50, especially if it’s a case where there is going to be maintenance and child support that’s to be paid by the person keeping the business, so the person needs the business to keep producing the income.”
Enough to go around
The Law Journal article notes that, in the Hamms’ case, the billion-dollar settlement amounts to about a seven-percent appreciation of the business during the period of the 26-year marriage. Like New York, Oklahoma is an equitable distribution state, so when the court finds something to be a marital asset, it has the power to divide it equally—but it does not mandate it be done that way.
“An advantage in big-money cases over conventional ones,” Mr. O’Reilly said, “is they can be easier to decide because there usually is enough money to go around.”
A well-known Buffalo matrimonial litigation attorney, Mr. O’Reilly handles all aspects of divorce and separation, including the modification and enforcement of existing matrimonial judgments.