Word: texaco
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Dates: during 2000-2009
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Angry and vengeful, Pennzoil's Liedtke sued Texaco, and last week the oil giant paid a painful price for its successful maneuver. A Houston jury decided that Texaco had sabotaged Pennzoil's contract with Getty, and fined Texaco an awesome $10.5 billion. It was the largest sum ever awarded in a corporate court fight, dwarfing the $1.8 billion won by MCI in a 1980 suit against...
Testifying by videotape, Getty told jurors that a few days after sitting down with Liedtke, he had learned that the J. Paul Getty Museum had agreed to sell it's 11.8% stake in Getty Oil to Texaco. Getty, who controlled 40.2% of his family's oil company, described being approached by Texaco, which wanted to buy his shares. He explained why he agreed to make a deal: he feared that by keeping his shares while others sold out, he would be just a minority stockholder with no real power...
...Texaco Attorney Richard Miller tried to show that Getty's agreement with Houston-based Pennzoil was never consummated. Getty Board Member Henry Wendt testified that the offer of $110 a share by Pennzoil's Liedtke was "hostile" and said the board had rejected it on Jan. 2. Miller argued that Getty's board had felt trapped by Pennzoil's offer and sought out a so-called white knight to be a friendlier merger partner...
...buttressed his case with a memorandum of agreement signed on Jan. 2 by Liedtke, Getty and Harold Williams, who represented the J. Paul Getty Museum. The document called for Getty to be acquired by a partnership of Pennzoil and a trust composed of the Getty heirs. Jamail contended that Texaco had unethically pressured key Getty shareholders to break the pact with Liedtke and opt for a higher offer...
Reverberations from the Houston decision echoed down Wall Street. The day the verdict was announced, Texaco stock fell $3, to close at $36.25, while Pennzoil shot up $7.62, to $57.50. Some irate legal experts felt that the compensation awarded to Pennzoil was disproportionate to the injury. Said Martin Klein, chairman of the American Bar Association's bankruptcy-litigation subcommittee: "Pennzoil is in a better position than it would have been if the merger had gone through...