2 Hunt Brothers Seek Bankruptcy Court Protection

Nelson Bunker Hunt and William Herbert Hunt said Wednesday that they have filed separately for personal protection under Chapter 11 of the U.S. Bankruptcy Code.

“The Chapter 11 reorganization cases are a direct result of the outrageous verdict in favor of Minpeco (SA), the Peruvian-government-owned plaintiff in a civil action in New York,” a Hunt spokesman said.

The Hunts said they might be required to post a $225-million appeal bond against the possibility that the jury verdict against the Hunts in U.S. District Court in New York is upheld on appeal.

The jury last month found the Hunts guilty of manipulating silver prices and awarded Minpeco more than $134 million in damages.

The Hunt brothers, not including Lamar Hunt, who was also named in the Minpeco case, said that to raise the $225 million required by a bond would mandate a “fire sale” of assets in an already depressed economy and would result in nonpayment to business and personal creditors.

The Hunts said they filed for protection from creditors rather than face those unacceptable alternatives and to provide time to mount further legal strategies.

“I expect that the protection of the reorganization laws will permit me the time to continue the fight to correct the injustice of the jury verdict,” Herbert Hunt said. “The thought of even a dime going to the government of Peru is repugnant.”

“The jury trial (in the Minpeco case) 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 toward that end,” Bunker Hunt said.

The lawsuits stem from the Hunt Brothers’ alleged attempts in 1979 and 1980 to corner the world market in silver.

The Minpeco jury found that the brothers conspired with Mahmoud Fustock, a businessman and the brother-in-law of the crown prince of Saudi Arabia, and the International Metal Investment Co.--a Bermuda corporation owned by Bunker, Herbert Hunt and two Saudis, Mohammed Aboud al-Amoudi and Ali bin Mussalem -- to buy up one-third of the world’s silver.

The jury also found that while the Hunts were buying silver with their international colleagues, the price of silver went from $9 an ounce to more than $50 an ounce between September, 1979, and January, 1980.

However, the bottom fell out of the market and prices slumped to $10. The Hunts bought 59 million ounces of silver in less than a year, but instead of making $4 billion as they had projected, the brothers lost $1.5 billion.

Placid Oil and Penrod Drilling Co.--both owned and operated by the three brothers’ estates--are protected by separate bankruptcy agreements approved earlier this month.