Word: bonding
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Texaco's DeCrane immediately called a press conference in White Plains to say that unless the company got new legal relief from having to post a $10 billion bond, it might be forced into bankruptcy proceedings. The company's legal team, led by David Boies of Manhattan-based Cravath, Swaine & Moore, obtained a temporary restraining order in Texas that barred Pennzoil from making any moves to seize Texaco's assets. Meanwhile, Kinnear called Pennzoil's Liedtke and asked for a face-to-face meeting in Houston. Liedtke agreed...
Kinnear brought out a typewritten note that outlined what Texaco would be willing to put up for a bond while the case remained on appeal. After two hours of discussion, Liedtke declined the offer. The sides agreed to meet again the following afternoon in a Houston condominium owned by Pennzoil...
That next meeting was limited to Kinnear, DeCrane, Liedtke and Kerr. Kinnear arrived with a new proposal in hand to resolve the bond question. As the four men argued the matter over coffee and soft drinks, they began to discuss the possibility of a comprehensive settlement that would end the legal battle altogether, according to sources close to Texaco. After the meeting broke up, Kinnear sent another proposal to Liedtke. His response: No deal. In the meantime, Jamail was telling the press that no discussions about a final settlement were being held. Texaco accused Jamail of making misleading statements about...
...source close to the negotiations said that by Thursday night Texaco had presented Pennzoil with four proposals regarding the bond dispute and five possible final settlements. "Pennzoil rejected each offer," he recalled. "But they refused to make any counteroffers." Pennzoil's attorneys argued that Texaco's offers were all similar and grossly inadequate...
...rejected it. That evening Kinnear and DeCrane gave up and flew back to New York. Texaco's lawyers then filed an affidavit with the Texas appeals court in which the company swore that it could not afford to put up more than $500 million in additional assets for a bond. The maneuver seemed designed to put extra pressure on Pennzoil to accept a settlement. In response, Pennzoil proposed to the court that Texaco could set aside assets worth about $5 billion for a bond without being forced into Chapter 11. Said Pennzoil Attorney Irvin Terrell: "Everyone has a constitutional right...