Pennzoil, indicating that it will probably not challenge Texaco's bankruptcy filing in court, said Wednesday that as the giant oil company's largest single creditor it plans to play "a central and extremely active role" in the bankruptcy proceedings.
Among other things, the Houston-based company said it will seek a seat on the Texaco creditors' committee likely to be formed within the next two weeks. Pennzoil also said it asked Bankruptcy Judge Howard Schwartzberg in White Plains, N.Y., who is presiding over the case, to allow Texaco to continue its appeal of the multibillion-dollar jury award to Pennzoil that ultimately led to Texaco's bankruptcy filing.
Texaco has also said it wants to continue its appeal, which is due to be heard next by the Texas Supreme Court. Permission for that should be granted routinely, bankruptcy lawyers say.
Pennzoil's statement, issued by Michael J. Crames, its bankruptcy lawyer, represents its first formal reaction to Texaco's filing Sunday of a petition for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
Undecided on Challenge
The key liability faced by Texaco, the largest company ever to take such a step, was the nearly $11-billion judgment, with interest, that it lost to Pennzoil in a 1985 jury trial of Pennzoil's contention that Texaco improperly outbid it for Getty Oil.
Texaco executives have claimed since Sunday that Pennzoil's refusal to negotiate an out-of-court settlement provoked the maneuver by the largely solvent corporation.
Some Pennzoil officials have suggested in the last few days that they might challenge the Texaco filing in court as an illegitimate use of the bankruptcy laws. But Crames said in an interview that while a "decision has not yet been reached" on whether to file the challenge, "for the time being we are addressing the situation as Texaco being in Chapter 11, and we are treating this as a Chapter 11 environment."
Crames also dismissed speculation--some of it fueled by Texaco--that Pennzoil would avoid serving on the creditors' committee in order to remain free to pursue its own interests if they conflict with those of other creditors.
Meeting Expected in Two Weeks
"What we all want is to maximize our recovery and get it as quickly as we can," said Crames, who was the chief bankruptcy lawyer for Manville Corp. in its unprecedented 1982 filing for Chapter 11 protection from the burden of billions of dollars in asbestos-injury claims.
For their part, Texaco officials said they do not care whether Pennzoil serves on the committee.
"It's not a matter of great moment to Texaco," said Martin Bienenstock, one of Texaco's bankruptcy lawyers.
A meeting of creditors is expected to be called within two weeks by the U.S. Bankruptcy Trustee for New York, the Justice Department official responsible for managing bankruptcy cases in their early stages.
Meanwhile, spokesmen for both sides in the Texaco-Pennzoil dispute, which generated the largest civil judgment in U.S. history, said there have been no attempts since Sunday to reach a negotiated settlement in the case. A swift settlement would enable Texaco to emerge from bankruptcy within weeks or months, according to bankruptcy specialists.
Without one, however, Texaco's bankruptcy might last for several years.