Texaco

About Texaco

Texaco filed for Chapter 11 bankruptcy on April 12, 1987, to avoid posting a bond while appealing a 10.5 billion verdict. Pennzoil had sued Texaco for interfering with its acquisition of Getty Oil. A Texas jury awarded Pennzoil 10.5 billion, one of the largest civil verdicts in history. Texaco filed for bankruptcy to avoid posting a 12 billion bond required to appeal. The case was settled for 3 billion in December 1987. Texaco emerged from bankruptcy in April 1988. The case was controversial because Texaco used bankruptcy, typically for companies unable to pay debts, as a litigation strategy for a solvent company. The strategy worked, reducing the judgment from 10.5 billion to 3 billion. Texaco was later acquired by Chevron in 2001.