Boardroom Maneuvering Over Getty Oil Sale Involving Former SEC Chair and Museum Trustees

The Museum was more outraged than | was. Marty felt that he had been used. He and Harold Williams, a business-savvy guy who had chaired the SEC under Jimmy Carter, realized that if I could be hog-tied, the Museum with its 11% was the next domino. This was in November of 1983. Within a few weeks, the Museum and | signed a “consent of shareholders” taking over the company. The required public disclosure of this, on top of the tripartite agreement and co-trustee lawsuit before, was blood in the water. Pennzoil launched a hostile takeover bid in December. My concern was that the trust should not be locked in a minority position. | met with Pennzoil in New York. We resolved that to my satisfaction. The Getty Oil board met, also in New York, on January fourth. The mood was not sunny. Harold Stuart, one of the brightest and finest board members, assumed that I had invited the Pennzoil bid. Chauncey Medberry thought I should be sued. But Sid and the board acted responsibly overall. We countered with a higher price, Pennzoil accepted, and we went home thinking we had a deal. Texaco offered a higher bid two days later. Was Getty Oil already bound to Pennzoil? Its lawyers and mine said it wasn’t until the final agreement was signed. I had my doubts. But I liked Texaco’s offer better, and my duty was clear. The Trust and Museum would be paid cash for their shares, rather than locked in. | had insisted on language in the Pennzoil agreement that bound me only as “consistent with my fiduciary duty.” My duty, in the light of legal advice, was to accept Texaco’s offer. | did, and voted the same way as a member of Getty’s and the Museum’s board. Those were fiduciary duties too. Pennzoil sued Texaco, and eventually won punitive damages of some eleven billion dollars. The Museum and Trust had cashed out. We were not parties. The Pennzoil and Texaco filings both spoke well of me. But there was still the lawsuit seeking a corporate co-trustee. That would have been very dangerous before the sale to Texaco cashed us out. A corporate co-trustee might well have assented to “corporate Chapter 1: Recollections 1/06/16 12 HOUSE_OVERSIGHT_010928