Hunt company files for bankruptcy

Press, 1 September 1986, Page 17

Hunt company files for bankruptcy

NZPA staff correspondent

Washington The main company owned by the wealthy Texan Hunt brothers has filed for bankruptcy in a Dallas court, seeking protection from its creditors. The Placid Oil Company, described by the “New York Times” as one of the largest privately owned oil companies in the United States, filed for protection under chapter 11 of the bankruptcy code, action designed to keep Placid’s lenders from beginning selling off oil and gas fields, land, stock and real estate. The Hunt brothers — Nelson, Bunker, W. Herbert and Lamar — were, through Placid Oil and the Penrod drilling company, the world’s largest driller of offshore oil wells, involved in the unsuccessful search for commercial reserves of oil in the Great South Basin and other offshore areas of New Zealand in the last decade.

The “New York Times” reported that the brothers, whose fortune was estimated to exceed SUS 6 billion in the late 1970 s before several costly erors, share almost equally in the ownership of Placid through individual trusts.

It said that all three remain individually wealthy, but are locked in a battle with their banks trying to keep control of their principal investments, including Penrod.

Placid and Penrod owe a total of 5U51.5 billion to the. banks and stopped making payments last March, it said. The bankruptcy is seen as a legal move to safeguard Placid’s substantial assets, which the Hunts want to have in place when the oil industry rebounds from its present slump.

Placid has listed SUS2 billion in assets and 5U5979.3 million in debts in its chapter 11 filing, the same protective procedure being used by the A H Robins company which is being sued for millions by women damaged through use of the Daikon Shield contraceptive device.

Penrod' is not included in the bankruptcy code filing, though its debt is SUSBSO million and sales are minimal. That is because the banks have not yet made any attempt to foreclose on Penrod’s assets.

The Hunts, who have also in the past been buyers of New Zealand bloodstock, saw their financial luck turn sour in the 1970 s when an apparent attempt to corner the world silver market failed.

To get over that crisis, the Hunts bailed themselves out by arranging a loan of SUSI.2 billion for Placid.

But that, said the “New York Times,” left Placid vulnerable when oil prices collapsed. A year ago the brothers’ net worth was estimated at SUS9OO million for Bunker, who is 60, SUSBOO million for Herbert, aged 57, and SUSSOO million for Lamar, aged 53. The chapter 11 bankruptcy filing means all debts owed by the company are frozen while the company is allowed to keep operating. The Hunt empire was founded by the brothers’ father, H. L. Hunt On his death, H L Hunt, who had left home as a teenager without money or education, had a fortune estimated at SUS 4 billion, mostly made from ownership of a giant East Texas oilfield he bought with a borrowed SUS3O,OOO.

Harry Hurt, author of a biography of the family, said.

“The' fact that the Hunts have declared bankruptcy is to Texas the equivalent of the Rockefeller family declaring bankruptcy in New York.