Broken windows, looting and fires were some of the lasting images from the Ferguson, Missouri riots. And if you looked at those pictures closely, you may have noticed that a substantial number of the damaged businesses were locally-owned, “mom and pop” shops. And if you are a business owner, you couldn’t help but ask yourself how would you pay for the damage if there was a riot in your community. Fortunately, most commercial property and business owner insurance policies include coverage for property damage due to riots. Some policies also include “business interruption” coverage for lost income when damage is so substantial that the business has to shut down until repairs are completed. Again, coverage depends on the specific policy. So, a business owner would be advised, as part of their year-end evaluation of their business, to review their policy with their insurance agent to ensure their business is covered for such an event.
With an ongoing Oklahoma divorce case in mind last month Tilting wrote about Tigh A. Knott, his wife Lucy Knott and how a business owner’s divorce can impact his business and affect his partners. The real players were Harold Hamm and his wife Sue Ann.
Last week the court granted Oklahoma oil tycoon Harold Hamm (aka “Tigh”) a divorce from Sue Ann. Harold was ordered to pay her $323 million before end of 2014 and $7 million a month for 93 months. Harold’s fellow shareholders were relieved. Why? Because Hamm gets to keep his company and they don’t get Sue Ann as a member of the board. A larger property award might well have required Harold to sell controlling interest to get enough cash. Or, worse yet, placed his ex-wife on the board. Could Harold aka “Tigh” have avoided betting his company?
Absolutely. Either or both of a prenuptial agreement and a company agreement (signed by his wife) could have sidestepped the drama.
The Facts. Harold Hamm is a self-made oilman and the chief executive and majority shareholder in Continental Resources. His foresight and timely investments in the Bakken Shale formation and fracing technology turned his company into a powerhouse and made him a billionaire 18 times over. Due to a lack of planning – a prenuptial agreement or a company agreement – Harold’s ex-wife was awarded over two billion – that’s “billion” with a “b” – dollars worth of marital assets, including a payment that Mr. Hamm must make to his wife of almost one billion dollars. The payment is so large that the presiding judge ordered that it be secured by a lien on twenty million shares of Mr. Hamm’s stock in Continental, valued at over one billion dollars. A copy of the Court’s 80-page long Memorandum Order can be found here.
Tilting the Scales in Your Favor – 4 Reasons to Sign a Prenuptial Agreement.
- Protect your business: If you own your own business, a divorce can cause that business a myriad of problems. Protect it with a prenuptial agreement and perhaps a company or shareholder agreement.
- Protect your partners: If you have partners, failing to have a signed shareholder agreement with all owners and spouses risks that, upon any divorce or death, the affected spouses may well become your partners with the right to participate in business decisions.
- Protect you (and your business) from debt: If most of your net worth is tied up in the value of your business and you have to split it with your spouse, then you either have to sell your stock or go into enough debt to pay off the divorce court’s property award. The right prenuptial and / or company agreements can avoid that risk.
- Protect your Business Valuation: Absent an agreement otherwise, a business can be valued a number of ways. Those signing your company agreement can agree in advance the method by which a partner’s ownership interest is valued and how a surviving spouse or ex-spouse will be paid, saving both time and money.
Previous Tilting Articles: Protecting your Business from a Lack of “Wedded Bliss”; How to Dissolve a Business;
Believing that she could no longer endure around-the-clock noise, dust and truck traffic in her residential Denton neighborhood, Lisa Frick and friends collected signatures to put a proposed ordinance on today’s ballot Generally Providing That Hydraulic Fracturing Operations are Prohibited in the City of Denton. Frac Petroleum Company, among others, argues that the City of Denton cannot unilaterally prohibit fracing operations anywhere because state rules outweigh local laws and because landowners have a right to the value of their land (and minerals) which cannot be taken without compensation. Who’s right?
Hydraulic fracturing, or “fracing,” is a well-stimulation process used to maximize the extraction of underground resources including oil, natural gas, and geothermal energy that injects water, sand and chemicals under high pressure into a well, cracking the rock shale.
- There are over 281 active gas wells permitted within the Denton City Limits
- In 2013 Denton established a 1,200-foot setback from homes for new wells
- Existing Denton drilling permits are vested under an ordinance with a much closer setback – some 200 feet from homes and parks
- New rule is inapplicable to wells with existing permits, subject to fracing at any time
- Drilling protects local economy, jobs, revenue to schools / colleges and local government
The Issues – “Come and Take It” – Who wins when
Denton and Individual Surface Owners challenge Texas, Drillers and Property Owners
Individuals argue that Fracing –
- Contaminates the water supply
- Depletes water supplies
- Harms air quality
- Causes earthquakes*
State and Mineral Owners, predictably, deny these claims and argue that –
- State agencies have strong track record of monitoring and regularly modernize
- Only Texas Railroad Commission and, in some instances the Texas Commission on Environmental Quality have authority to adopt oil and gas drilling rules
- If passed, the Denton Ordinance would be an “unconstitutional taking” of the mineral owners’ valuable property rights
- Contaminated water is not caused by the fracing process, but something else
Denton Mayor Chris Watts says, if his city adopts a fracing ban today, “It may be just the beginning for us,” said Watts, an attorney. “The vote is not the end of the story. It may just be the beginning. It may be decided at the courthouse or at the statehouse.”
My insightful Gray Reed partner Charlie Sartain and expert Oil and Gas attorney regularly blogs about Energy and The Law and has several compelling and humorous entries worth your read:
What’s Going On in Denton, Texas?
Truth and Illusion in the Fracing Debate
Frac(k)ing, Parr v. Aruba, and Minority Oppression
In Wyoming, a Higher Burden for Chemical Disclosure Exemption?
Barnett Shale Drilling Increased North Texas Ozone – Fact or Fiction?
Hydrocarbon Exposure Reconsidered
Also, check out this Tilting the Scales article.
* Earthquakes and other claimed fracing risks will be addressed in greater detail, especially if Denton votes to ban fracing tonight.
Last month one of our lead articles was Cyber Security: Forewarned is Fair-Warned.
Last week the New York Times published an article reporting that at least 1.2 billion usernames and passwords were hacked by a Russian cybercrime group by the name of CyberVor from upwards of 420,000 distinct web sites.
A very interesting CNN article on cyber security acknowledges the breach, identifies Hold Security as the company that found the hack and suggests they may have a commercial interest in the hack report. To all of this the CNN author Chester Wisniewski says: Yeah, so?
Wisniewski suggests that Hold Security is provoking internet users to panic and rush to change all their passwords, or better yet to accept its offer to let you know if you’ve been hacked for a mere $120 apiece. He goes on to suggest that the cyber security criminals only have cryptic representations of the passwords, or partial passwords at that.
Weighing In. Either way, isn’t it about time you undertook a regular routine of changing your passwords? Particularly those that have access to information that you would just as soon not share with the world? At the very least, let’s all use different passwords depending upon the importance of the access… and get rid of “password123”!
For those of you who took an interest in our Affluenza article from June, you may be interested to know that there are developments in the real-life story. Frederick Couch, the father of “affluenza” defendant Ethan Couch, was arrested for impersonating a police officer in North Richland Hills, Texas.
Thanks to NBC5’s Scott Gordon for the tweet – https://twitter.com/ScottGordonNBC5/status/501824529178443778/photo/1
Below are Texas’ Top 10 fireworks laws (but remember, laws may vary county to county) reposted from our July 2008 blog.
For a great Independence Day Parade, check out the Rotary Club of Park Cities 4th of July Parade for parade route and time.
Happy Independence Day to America, this July 4, 2014!
THE TOP TEN TEXAS FIREWORKS LAWS, HOW TO AVOID GETTING POPPED
- Ever notice how we don’t shoot fireworks off for Easter? Fireworks can only be sold from June 24th through July 4th and December 20th through January 1st.
- It is illegal to sell or shoot fireworks within 100 feet of a place where flammable liquids, flammable compressed gasses or fireworks are sold or stored. Makes sense to me!
- Despite what you may have seen in the movies, it is illegal to shoot fireworks from or towards a motor vehicle, including boats.
- It is illegal to shoot fireworks from a public roadway, public property, park, lake or U.S. Corps of Engineer Property. Would hate to set a lake on fire.
- The minimum age to buy or sell fireworks was recently changed from 12 to 16. Should probably be 26. Continue Reading Happy Fourth of July Weekend!
Taking advantage of his car dealership owning parents being on vacation in the Bahamas, Cache Bar, a minor, invites his high school buddies over to liberate his parents’ locked libation cabinet. Well lubricated, Cache builds quite the bonfire in the backyard knowing that no one in their hometown of Daughtry, Texas, can water their lawns because of the severe drought. The bonfire consumes Cache’s backyard grass, and then spreads and destroys three million-dollar mansions on Cache’s street. When Cache is charged with intentionally starting a fire that recklessly damaged his neighbors’ homes, his parents scramble for a defense to help him avoid arson charges – a state jail felony. Cache’s parents read a news article about another Texas teenager who avoided jail by asserting an “affluenza” defense – that the teenager was the product of wealthy, privileged parents who never set limits for their son. Will “affluenza” keep Cache out of jail? If so, does that affect his parents?
Willa Bepayed is a standout attacker and a Senior on State Tech’s volleyball team. Willa read about Kan Doit, the Southeastern quarterback who’s leading the unionization drive before the National Labor Relations Board (NLRB). Like Kan, Willa Bepayed and her teammates also routinely spend 40 to 50 hours a week on volleyball – a full-time job. She also contends that her commitment discouraged her from entering State Tech’s pre-med program. Can Willa Bepayed and her teammates form their own union and bargain collectively? If so, do they risk encountering negative consequences if they are permitted to unionize?
Not likely to unionize, in Texas. The NLRB decision is limited to private universities as public institutions are governed by state labor laws. And, given that 24 states, including most of the South, are right-to-work jurisdictions, the vast majority of major college football teams could not unionize as Southeastern may.
Special thanks to guest blogger Alex Fuller for this month’s post.
Who steals my purse steals trash; ’tis something, nothing;
‘Twas mine, ’tis his, and has been slave to thousands;
But he that filches from me my good name
Robs me of that which not enriches him,
And makes me poor indeed.
While on a date to the Laugh Factory Comedy Club, Terry Tellsall busted a gut laughing and was rushed to Texas General Hospital. Incensed by the treatment and bedside manner he received from Dr. B.D. Manner, Terry barraged his friend Cindy Cussin with texts detailing Dr. Manner’s inability to remember critical surgical procedures and his comments that “with a belly that size, you’re lucky you only busted one gut.” The next day, Terry posted his accusations on a popular doctor-rating website.
Luckily for Terry, the attending Nurse Nancy smelled Dr. Manner’s whiskey breath, heard his comments, and thankfully reminded him of the right procedure. However, Terry’s friend Cindy Cussin was Dr. Manner’s cousin and forwarded Terry’s texts to him. When Dr. Manner read the texts and received the early morning Google Alert with Terry’s website posts, he immediately instructed Able Attorney, Esq., to file a defamation lawsuit against Terry. Is Terry liable for libel?
Probably not. Truth is still a defense to any claim of verbal (slander) or written (libel) defamation. Better yet, the 2011 Texas Anti-SLAPP statute makes it harder for defamation lawsuits to be used as a bullying tactic.
During the holiday season, Bullseye, a big box retailer, was the victim of a cyber attack that compromised the credit and debit card information (including PIN and CVV codes) of nearly 40 million of its customers. The attack immediately spawned dozens of class action lawsuits against Bullseye by customers, alleging that the retailer was negligent in protecting their financial information. What liability does Bullseye face and what can be done to mitigate that exposure?