Pennzoil Loses Round to Texaco
Texaco won another legal skirmish in the New York appellate courts Thursday when Pennzoil’s request to protect its $11.1-billion judgment against Texaco by filing liens on the larger oil company’s assets was denied.
In a one-page ruling, the U.S. 2nd Circuit Court of Appeals rejected a motion filed by Pennzoil six days ago to modify the court’s Feb. 20 ruling, which also favored Texaco. The February ruling, in addition to sharply reducing the bond that Texaco must post before it can appeal the record judgment, prohibits Pennzoil from attaching liens on Texaco’s assets until the appeals process is finished. It was the lien segment of the ruling that Pennzoil wanted modified.
Pennzoil, as Texaco’s largest creditor, has argued that it needs to protect its financial interest in Texaco’s assets by filing liens.
As oil prices have plunged, reducing the value of many Texaco assets, that is even more important, Pennzoil argued to the court--but to no avail.
A Pennzoil spokesman said late Thursday that the company had not yet seen the ruling and so could not respond in detail. But he said Pennzoil will continue to press for a U.S. Supreme Court review of the Feb. 20 decision.
Texaco ‘Pleased’
The high court has not notified Pennzoil yet whether it will hear the case, and the company said it doesn’t expect an answer this week.
Texaco, characterizing the Pennzoil motion as “frivolous,” said only that it is “pleased” with the ruling.
Separately, Pennzoil Chairman Hugh Liedtke disclosed that Pennzoil twice has offered formal plans to settle the dispute over Texaco’s 1984 acquisition of Los Angeles-based Getty Oil.
Speaking to a meeting of New York financial analysts, Liedtke said the “two detailed settlement proposals, both in writing” were rejected. He didn’t elaborate.
Until now, all that was known of the off-again, on-again settlement talks was that Texaco had made two formal offers, both of which Pennzoil rejected.
The first, on Dec. 10, just 10 minutes before the Texas jury verdict against Texaco was appealed, offered what Liedtke described Thursday as a “vague proposal that purported to offer 3/7ths of Getty Oil’s stock at $112.50 per share, along with some ill-defined recompense for the assets Texaco had depleted.”
The second offer, on Jan. 7, proposed that Pennzoil be acquired by Texaco for an amount that neither side has disclosed. According to Liedtke, however, it was for “less than the cash sellout value of Pennzoil.”
