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Still, the Hunts could have overcome the silver debacle if fundamental economic changes had not battered the foundations of all their wealth. Unlike the Bass brothers and several other rich Texas families who invested in a wide variety of industries, the Hunts concentrated their holdings in oil, sugar, silver, real estate and cattle. They, like their father, had absolute faith in the value of tangible assets. In the 1970s the Hunt philosophy was golden: as inflation accelerated, the worth of the brothers' investments surged. But when inflation subsided and oil prices fell during the 1980s, the value of almost everything the Hunts owned began to sink. For example, they filed for bankruptcy protection for their sugar-refining company, Great Western Sugar, in 1985, and their enormous investments in oil leases in the Arctic proved disastrous. Says Bernard Weinstein, director of the Center for Enterprising at Southern Methodist University in Dallas: "The 1970s saw rising commodity prices. In the 1980s the gods are on the other side, and the Hunts are victims like everyone else."
So far, the life-styles of the Hunt brothers seem little affected by their corporate financial woes. The bulky, 6 ft. 2 in. Bunker still owns one of the world's largest stables of thoroughbred racehorses. Herbert maintains an exceptional collection of antique cars. Lamar, a keen sports investor, remains the owner of the Kansas City Chiefs football team. But if the Hunts' creditors cannot draw enough cash out of Placid Oil, they may try to dip into the brothers' personal pockets.
The Hunts are confident their empire can make a comeback. They know, however, that if forced to liquidate their assets at today's depressed prices, the result would be abysmal. Placid Oil may be worth more than $1.9 billion, says John McMullen, a Cambridge, Mass.-based energy consultant hired by the Hunts to assess their holdings. But its assets must be developed to realize that worth. If the company were liquidated now, McMullen estimates, it would fetch just $180 million.
The Hunts are counting on a turnaround in oil prices to bail them out. They estimate that crude will be selling for $30 per bbl. by 1989. While the price has risen 36%, to more than $16, during the past two months, that is still a long way from the Hunts' optimistic projection. Edward Vetter, a Dallas energy consultant, speculates that a return to $30-per-bbl. oil might not happen for ten years.
Meanwhile, the Hunts remain vulnerable to further shocks. Because their holdings are so closely linked, the family could be forced into a wave of bankruptcy filings if creditors moved to claim assets not protected by the courts. Chapter 11 could be the only way to protect what is left of their fortune. Hunt Attorney Edwin McCabe admits that future bankruptcy filings are possible.
No one expects the battle between the Hunts and their bankers to be resolved easily. Houston Lawyer John Bennett suspects that in light of the suits and countersuits between the Hunts and their lenders, the two sides "may have come close to poisoning their relationship." Neil Orleans, a partner in the Dallas law firm Wise & Stuhl, says the case could turn into "the world's biggest mess."