The company's grip had started to slip in late 1936 and 1937, and by 1939, it was severely overextended. Almost $1 million was owed to both Oil Well Supply and Continental Supply.
"We were more than insolvent at the time," Helmerich recalled later. "The supply companies were just pressing me every day, calling me two and three times a day for payment." In all his years of juggling finances and meeting with bankers and supply company creditors, he had never been in such difficult straits.
As the debts mounted, it became apparent that there were only two ways out. One was to liquidate and perhaps even declare bankruptcy, a path that had been taken by many others in the business. The other was to restructure with additional long-term bank loans and equity financing.
Although he was under pressure from some creditors to take the first option, he refused and began a furious search for new financing. Finally, he was able to obtain a loan from the First National Bank of Oklahoma City and another from the First National Bank of Boston. Oil Well Supply and Continental Supply also helped by continuing to advance credit. Once again, Helmerich's deserved reputation as a trusted financial partner who would find a way to pay the notes was the key to keeping the company in business.
Under an arrangement with White, Weld, Helmerich & Payne was reorganized as a Delaware corporation. White, Weld took five-year notes and received 80,000 shares, with an option for 100,000 additional shares. Several new members were added to the Helmerich & Payne board, and Walt Helmerich accepted his dilution of ownership — and power.
The arrangement was beneficial for everyone involved. White, Weld eventually realized a return ranging from 2,500 to 3,500 percent. Continental Supply and Oil Well Supply were paid in full and continued to do business with a stronger Helmerich & Payne. And the company, itself, had survived America's most difficult decade.
The national struggle that began with the Wall Street crash would finally give way to a greater challenge — on December 7, 1941, at a U.S. naval base called Pearl Harbor.
