Latest Getty Battle Fought on Wall St. : Analysts Get Briefing: Pennzoil Presents Its Case Against Texaco
Seeking to discredit what it calls “big lie” tactics by Texaco, Pennzoil brought its multibillion-dollar case against the oil giant to Wall Street on Tuesday.
During a two-hour briefing for securities analysts and lawyers, a team of Pennzoil lawyers and executives reiterated its view of the disputed battle for Getty Oil, belittled Texaco’s reliance on a “fatally flawed” securities law for its next round of appeals and urged public disregard of the court briefs that dozens of officials have filed on Texaco’s behalf.
Citing “very troublesome” evidence that Texaco may not have the money to pay its $11-billion debt if the courts ultimately decide in Pennzoil’s favor, Pennzoil Chairman J. Hugh Liedtke also vowed to fight a bid by Texaco to disband a creditors committee co-chaired by Pennzoil and to pry financial information from Texaco through the bankruptcy court. Citing Pennzoil’s refusal to settle the dispute, Texaco sought bankruptcy court protection in April.
Pennzoil’s appearance at New York’s Plaza Hotel, Liedtke conceded, was a bid to counter Texaco assertions akin to “techniques of the big lie” campaign in World War II: “If you tell a lie often enough, pretty soon people will believe it’s true.”
“I have never in my lifetime seen as much misinformation and disinformation about the facts and about the law . . . particularly here in New York,” he said.
With the dispute in its third year, both sides have become increasingly vitriolic and are waging their battle as much before the public as in the courts. Pennzoil won the first two court rounds and the Texas Supreme Court will decide shortly whether to hear Texaco’s appeal.
Collect Call
Asked whether he is more in the mood now--after the Securities and Exchange Commission filed a court brief on Texaco’s behalf--to negotiate a settlement, Liedtke replied: “We’ll accept a collect call.” The last time the two sides talked settlement, just before the bankruptcy filing, Texaco offered $2 billion and Pennzoil countered at $4.1 billion.
Foremost in the Pennzoil team’s minds Tuesday were the controversial friend-of-the-court briefs--which such notables as the SEC and New York Attorney General Robert Abrams have filed for Texaco--and their contents.
Harvard University law professor Laurence H. Tribe, Pennzoil’s constitutional law expert, attacked both the SEC brief and Texaco’s reliance on the securities rule detailed in that brief. The rule, 10(b)13, prohibits a company from making a private deal with some shareholders while it has an offer on the table to buy the entire company. Texaco contends that Pennzoil broke that rule, thereby invalidating any contract it might have had with Getty.
