Creditors Seek High-Low Limit in Texaco Case

The committee representing Texaco creditors sought permission Tuesday to affix both a floor and a ceiling on the price Texaco must pay Pennzoil to settle their protracted feud over Getty Oil.

The committee, in an unusual bid to expedite a settlement, also asked the U.S. Bankruptcy Court to appoint a “distinguished American” as an examiner to “work with Texaco and Pennzoil in an effort to bring them together.”

Increasing Worry

Texaco sought Chapter 11 bankruptcy protection from its creditors in April to forestall enforcement of a $10.3-billion judgment that Texaco improperly interfered with Pennzoil’s acquisition of Getty Oil. Creditors other than Pennzoil have become increasingly worried about the prospects of getting their money ever since the Texas Supreme Court declined earlier this month to hear Texaco’s appeal, and have stepped up their efforts to bring the sides to the bargaining table.

Pennzoil said it opposes the appointment of an examiner because “that is not going to shorten the negotiations at all and could cause additional litigation.” But the concept of a floor and a cap “certainly merits some exploration,” said spokesman Robert Harper.

Texaco had no comment on the contents of the proposal, which it hadn’t yet seen. But spokesman K. Peter Maneri said “the most constructive role for the committee would appear to be to discuss its ideas and suggestions with the company rather than (to make) additional court filings.”

Mimimum Amount

Speaking for the creditors committee, Chairman Charles F. Luce said the floor would represent the minimum amount Pennzoil would accept from Texaco while the litigation is pending.

The ceiling, Luce said, would be the highest payment Texaco would be required to make in the event that Pennzoil wins the pending litigation. It “would be set at a figure that Texaco could pay and remain financially viable,” said Luce, a Metropolitan Life Insurance Co. special counsel.