Hunt Brothers Yield Their Share of Penrod to Lenders

The Hunt brothers of Texas have given up their 50% stake in Penrod Drilling Corp. to a group of lenders after apparently failing to get financing to pay their bills.

The company as of Wednesday is owned by five banks, a partnership of Ft. Worth investor Richard Rainwater and Energy Service Co. of Houston, and R. D. Smith & Co. Inc., a securities firm.

Penrod reportedly was having difficulty meeting a loan payment of $25 million to $30 million due the lenders March 31. The payment was to be the first of 32 Penrod made on a $525-million note.

Penrod was founded by the late billionaire H. L. Hunt and had been operated by his sons Lamar Hunt, Nelson Bunker Hunt and William Herbert Hunt since his death.

The Hunts held a 50% interest in Penrod since it was restructured in 1988.

The banks held the other 50% but had been selling it off to parties interested in acquiring Penrod’s 40 offshore rigs, among the most modern in the world.

The share transfer ended a battle that has lasted nearly 10 years over Penrod. During that time, a big part of the fortune H. L. Hunt left his children has been tangled in lawsuits, bankruptcies, disputes with the Internal Revenue Service and other federal regulators.

The Hunts’ financial problems began in 1980 when Nelson Bunker Hunt and his brother William Herbert Hunt, lost $1.5 billion speculating in the silver futures markets. The silver losses were compounded by falling real estate prices and the collapse of the oil market.