Appointments available by video or in person.

Oil magnate facing complex property division woes during divorce

On Behalf of | Mar 27, 2014 | Family Law

Dividing up stock and stock options during your Colorado divorce may sound simple, but the fact remains that some property division issues require quite a bit of math. Family law professionals who have been following a high-asset divorce in nearby Oklahoma say that one oil magnate’s stock holdings could actually weaken his control of the company after the split. How can premarital assets turn into liabilities during a divorce? Today, we explore this phenomenon.

In the Oklahoma case, the judge agreed that most of the man’s stock in his own company, Continental Resources, was indeed considered premarital property. Those shares are not subject to property division with his soon-to-be ex-wife, who wed the man in 1988. However, state law dictates that the man must surrender half of the value of any increase in the stocks’ value. The woman must simply prove that the stocks’ price rose throughout the course of their marriage because of her husband’s contributions to the company.

In fact, Continental has enjoyed financial success, with company shares quadrupling since the initial public offering seven years ago. That boost resulted in a gain of $6.9 billion. Since the couple was together when the stock’s price rose, the woman is demanding about $3.45 billion in the property division negotiations.

Although the situation may look hopeless for the oilman, he still has a few legal strategies at his disposal. The man may be able to protect his stock gains if he can effectively argue that market factors caused the rise in prices. That is, the man must prove that the stock’s price would have risen, even without his leadership and contribution.

This complex high-asset divorce provides an excellent example of subtleties in family law that can rear their heads even after an asset has been deemed a pre-marital holding. Couples with questions about complex property division may benefit from the assistance of a Colorado family attorney. These professionals may help identify divisible assets, working to ensure that their clients get their fair share of the marital estate.

Source: The Wall Street Journal, “Divorce May Weaken Oilman’s Stake in Drilling Powerhouse” Tom Fowler, Mar. 21, 2014