Two Hunt Brothers Seek Personal Bankruptcy Protection
DALLAS (AP) _ Multimillionaire brothers Nelson Bunker Hunt and William Herbert Hunt each filed for personal bankruptcy protection Wednesday to avoid having to post a $225 million bond required for appealing a federal jury verdict against them.
A spokesman for the Hunts said the brothers decided to seek Chapter 11 federal bankruptcy protection from creditors to keep Minpeco SA, which won the verdict against them, from beginning foreclosure proceedings on their personal assets until the appeal could be made.
The jury decided Aug. 20 in New York that the two Hunts and brother Lamar Hunt must pay more than $130 million in damages for conspiring to corner the world’s silver market in the late 1970s, ruining the investments of Minpeco, the Peruvian government’s mineral marketing company.
The Hunts maintain that Peru, as the second-largest producer of silver in the world, could only be helped as the silver price rose.
Tom Whitaker, executive vice president for the Hunt Energy Corp., said the decision to seek Chapter 11 protection stemmed from a court requirement that they post a $225 million bond to appeal the verdict.
The Hunts said raising $225 million in an extremely depressed economy would force a ″fire sale″ of assets, and also would result in non-payment to business and personal creditors.
″Bunker and Herbert believe the jury verdict in New York is so unjust that they elected to seek Chapter 11 protection of the United States Bankruptcy Court in order to insure their ability to continue their businessses while at the same time appealing the silver case,″ Whitaker said in a prepared statement.
″The jury trial is the first step of a long civil process, and I expect that the verdict will be reversed or substantially modified and we will continue to work to that end,″ Bunker Hunt said in a statement released by Whitaker.
Wednesday’s filing was the latest chapter in the Hunts’ furious struggle to keep alive what once was one of the world’s wealthiest legacies.
The Texas brothers inherited a fortune from their late father, Texas oilman H.L. Hunt. But heavy losses in silver, oil and real estate had cut the brothers wealth from more than $5 billion to an estimated $1 billion, according to published reports.
Last Friday, a federal bankruptcy judge had approved a reorganization plan to settle $750 million in loans and pull the trust funds of the two Hunts and their brother Lamar out of Chapter 11 bankruptcy.
The plan called for turning their financially strapped Penrod Drilling Co., which is not in bankruptcy, into a corporation jointly controlled by creditor banks.
That plan was part of a settlement aimed at ending litigation between the Hunts and the banks, which they claimed were trying to force them out of business by refusing to renegotiate $1.5 billion in business loans.
The agreement, approved by U.S. Bankruptcy Judge Harold Abramson, also called for the brothers to pay $53.8 million in cash and surrender real estate in Texas, Kentucky and Arizona in exchange for $200 million in debts.
Placid Oil Co., owned by the Hunt trust estates, also is in Chapter 11 bankruptcy. The trust estates had offered in July to pay $803.5 million to Placid’s lenders, including $663.5 million in cash.
A proposed Placid reorganization plan called for the sale of the Hunt brothers’ interest in Thanksgiving Tower in downtown Dallas. It also would require the brothers to come up with $250 million in cash by borrowing on their successful petroleum properties.
Wednesday’s bankruptcy filings will not affect the reorganization of Placid Oil or the Hunt brothers’ trust estates, Whitaker said.