• U.S.

Troubled Hunts: Is there a silver lining?

2 minute read

When Texas Oilmen Nelson Bunker Hunt and his brother William Herbert went headlong into the silver market in 1979 and 1980, they pushed the value of the precious metal from $6 to $50 per oz. and accumulated a hoard worth about $10 billion. That forced up the cost of everything from photographic film to jewelry, and tempted thousands of Americans to sell the family sterling. But the Hunts lost as much as $1 billion in a day in early 1980, when the speculative bubble burst and silver prices collapsed. Five years later, the Hunt family’s woes continue to grow.

The Commodity Futures Trading Commission last week accused the brothers and seven cospeculators of illegally manipulating the silver market to drive up the price. The complaint charges that over a period of six months in 1979-80 the Hunts employed a global network of buyers to acquire more than 100 million oz. of silver, or about half the world’s annual production. If found guilty, the Hunts and the others could face fines approaching $1 million. Moreover, they could be barred from commodity futures markets. A Hunt lawyer, Walter Roach, called the accusations baseless and said the brothers would fight them. “The Hunts were totally aboveboard,” he said.

Life is growing ever more litigious for the bodacious Hunts. The Internal Revenue Service is attempting to collect from them more than $230 million in back taxes arising from the silver speculation. The Texas-size case–one of the largest IRS claims ever against a family for a single tax year–grows out of $163.1 million that was transferred in 1980 by Bunker Hunt and his wife Caroline to their three children and two sons-in-law. The Government contends that the transfers were gifts and that the elder Hunts owe some $112 million in gift taxes. Family lawyers deny the charges, saying the transactions were loans and therefore not taxable.

Lenders, too, are getting tough with the Hunts. The principal banks used by Hunt International Resources, a huge sugar refiner and drilling-rig operator, have stopped paying some of the company’s bills. The firm two weeks ago said that it would probably never be able to repay all of its $295 million in defaulted loans. One result: company paychecks were bouncing last week. Until recently, the banks were willing to keep lending to the company. Now the impatient institutions are putting heavy pressure on Hunt International to sell its assets in order to pay off its mounting debts.

More Must-Reads from TIME

Contact us at letters@time.com