Word: texaco
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Dates: during 1980-1989
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Meanwhile, the U.S. was faced with the spectacle of a healthy corporation sheltering under laws ostensibly intended for the weak and ailing. As Anthony Ludovici, an oil analyst for the Tucker, Anthony & R.L. Day investment firm, put it, "While Texaco will be in bankruptcy, Texaco won't be a bankrupt company...
...case won immediate fame as the biggest bankruptcy in U.S. history. Last week it threatened to become one of the most bewildering and perhaps most bitterly contested business crises in modern memory. The $10 billion legal battle royal between Texaco and Pennzoil clearly entered a new and murky phase after the country's third-ranking oil company (1986 sales: $32.6 billion) made its bombshell decision on Sunday, April 12, to file for Chapter 11 protection. Whichever side was right in the dispute, the horrendous legal tangle surrounding the two firms vastly increased -- along with the business uncertainty...
Nonetheless, as New York Bankruptcy Judge Howard Schwartzberg assumed his overseeing duties with Texaco, it seemed to many analysts that the company had suddenly gained the upper hand in the high-stakes brawl it had appeared to be losing. Said Sanford Margoshes, an oil analyst at the Shearson Lehman Bros. investment firm: "Texaco has bought time. Its prospects are not as bleak." Wall Street seemed to agree. When the New York Stock Exchange opened trading after Texaco's bankruptcy filing, the company's stock dropped from 31 7/8 to 28 1/2 a share. Then the holdings rebounded, closing last week...
...Board seemed to judge that Pennzoil's combative chairman, J. Hugh Liedtke, 65, had overreached himself in the dispute. It has dragged on since November 1985, when a Texas jury issued a $10.5 billion judgment against Texaco for inducing Getty Oil to break a merger agreement with Liedtke's Houston-based firm. Shortly before the bankruptcy, Texaco filed an affidavit in a Texas appeals court claiming that any settlement over $500 million would trigger defaults. Liedtke, on the other hand, said he turned down a Texaco offer of $2 billion two weeks ago. Liedtke wanted more like $4 billion...
Lawyers for both sides showed up last week at a Houston appeals-court hearing, which had been mandated by the Supreme Court decision, on whether Texaco should be required to put up a bond for some $10 billion while continuing to appeal the 1985 Texas judgment. Protecting itself from such an appeals decision had been a vital factor in Texaco's decision to flee into bankruptcy. The Houston hearing was stayed after Texaco lawyers argued that the Chapter 11 filing triggered an automatic halt to other legal proceedings. Pennzoil officials said they might challenge the bankruptcy petition, but at week...