Hunt Brothers Battling Foreclosure Deadline

The millionaire Hunt brothers of Dallas battled a looming deadline today as a group of banks threatened to begin foreclosing on properties Friday to cover defaulted loans.

The Hunts, their oil empire crumbling by falling prices, owe nearly two dozen major U.S. banks $1.5 billion in debts.

U.S. District Judge Barefoot Sanders on Wednesday refused to grant a temporary restraining order sought by Nelson Bunker Hunt, William Herbert Hunt and Lamar Hunt to protect their oil refinery and drilling businesses.

The ruling clears the way for Manufacturers Hanover Trust Co. and 22 other lenders to begin auctioning off collateral pledged by the Hunt brothers for $1.5 billion in unpaid bank loans made to their oil companies.

Considering Chapter 11

The foreclosures may also spell bankruptcy for Placid Oil Co. and Penrod Drilling Co., the Hunt family’s major holdings, which have been hard-hit by the downturn in oil prices.

“Chapter 11 is an option,” Stephen Gordon, an attorney for the Hunts, said after the court hearing. “The Hunts are very willing to consider it. Some existence under Chapter 11 is better than no existence at all, which is what the banks want.”

Gordon said he does not know whether the district court ruling will be appealed.

A spokesman for the Hunts said Penrod and Placid are “evaluating a number of options” to keep the two companies operating and to preserve about 20,000 oil-related jobs.

On Tuesday, the Hunts’ offices and their share of the glittering 50-story Thanksgiving Tower in downtown Dallas are scheduled for auction on the steps of the Dallas County courthouse.

Other Properties

A tract of undeveloped real estate in fast-growing north Dallas and a natural gas processing plant are also posted for foreclosure.

In Mississippi, the two brothers could lose oil and gas fields in four counties at a foreclosure sale scheduled Friday.

The ruling today was a victory for the 23 banks, which are the target of two antitrust lawsuits filed recently by the Hunt brothers seeking nearly $14 billion in damages.

The Hunts alleged that the consortium of banks failed to restructure their loans because the brothers would not participate in a secret bank scheme to create a monopoly of offshore drilling companies.