Recent cases only highlight the difficulty justice systems have in deciding who gets what in divorce settlements, says Charlotte Posnansky
A now infamous cheque — in the sum of $974,790,317.77 — has been doing the rounds on the internet. It was written in January by US billionaire Harold Hamm to his ex-wife, Sue Ann Arnall. By itself, it is just a mind-bogglingly large cheque. What makes it interesting — at least, for the lawyers — is that Arnall banked the cheque as full payment of her divorce award and then asked for more, disputing the original settlement. Arnall claims the judge was wrong to leave 90 per cent of the parties’ wealth with her husband.
Hamm is founder and CEO of Continental Resources, an oil and gas business in Oklahoma. He has had a bad year thanks to the dramatic fall in oil prices, which some say has pushed his net worth down by half from about $18 billion to $9 billion.
Arnall’s argument is that while the business existed prior to the marriage, it has grown in value by 40,000 per cent because of the rise in the share price during their 26-year marriage. Hamm contends that this was merely caused by rising oil prices — passive growth being excluded from account under Oklahoma law — but his former wife argues that the increase in value was down to his expert
management. The outcome of her appeal is pending.
When — as in a case like this — assets total in the billions, it is difficult to assess a fair divorce settlement. Clearly we are beyond looking at providing enough to meet the parties’ respective needs, but what is unclear is what the qualifying criteria for a fair award should be. This is an increasingly pressing question, as divorces among the richest individuals in the world become more common.
Last year the Swiss courts ordered Russian oligarch Dmitry Rybolovlev to pay more than CHF4 billion (’2.8 billion) to his former wife. They met as students and were married for 23 years, during which time Mr Rybolovlev set up his fertiliser business, which he subsequently sold, and then invested in AS Monaco football club.
He adopted a number of complex offshore tax and trust structures in an effort to protect his wealth — but in spite of this the court felt it was fair for his former wife to receive approximately half his assets.
In a long and fruitful marriage, perhaps it’s right that a wife should take an equal share even if not directly involved in the business responsible for generating all that wealth. It might also be disturbing for any children to see their parents having vastly different lifestyles and resources.
The advantages of wealth aside, being married to a billionaire businessman is also likely to bring with it its own sacrifices and problems. The couple presumably chose a life in which one spouse made the money and the other did not, and it is hard to place a monetary value on the contribution of a homemaker. On the other hand, if it was thanks to the husband’s hard work, risk-taking or unique flair it may not be considered fair to carve up his empire and allow his wife to leave with half the capital but none of the responsibility, free to continue her proverbial lunch dates and charitable pursuits without worry.
The recent divorce of ‘financial genius’ Chris Hohn from his ex-wife, Jamie Cooper-Hohn — who asked for half their ’1 billion fortune but was granted only a third because of her husband’s ‘special contribution’ — shows this is a difficult issue the justice system is far from resolving. And recently the issue of fairness upon divorce again made headline news in England with the long-awaited Supreme Court decision in Vince v Wyatt. In this rags-to-riches case, the most unlikely of candidates went from penniless traveller to eco-businessman with a net worth in excess of ’100 million at the flick of a wind-turbine-generated switch.
Although they divorced before he made his fortune, there was no evidence of the parties dismissing their financial claims against each other at the time. Ms Wyatt, the mother of his child, subsequently brought a claim 27 years after the separation and nineteen years after the divorce was granted. Her earlier applications had been dismissed by lower courts — justifiably, many people thought. So there was a huge buzz when the Supreme Court in fact allowed her further appeal and paved the way for a claim to be made.
The court suggested that she set her sights a little high at ’1.9 million. However, it felt that her brave struggle to raise their son, without financial support from Mr Vince, would justify compensation in the form of a modest mortgage-free property. It remains to be seen how the family court will quantify her award, if granted.
Exceptional individuals and the extraordinary facts of their lives often do not make it easy for judges to decide fair settlements when they divorce. While the importance of closing matters properly on divorce cannot be overstated, sometimes the law has no simple response to the extreme twists and turns of life.