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Karma can be a [bear]: A lesson from Pennzoil v. Texaco

In researching something, TIL (Today I Learned) that when Texaco got hit with a $10.3 billion damages verdict back in the mid-1980s (for tortiously interfering Pennzoil’s acquisition of Getty Oil), Texaco couldn’t find anyone to finance the required appeal bond in the same amount, and it even had trouble getting routine working capital, because of the high-handed way it had treated others in the past. As one author recounts:

When Texaco was doing well, it had played hardball with its lenders as well as with other oil companies. Now that it was in trouble, these lenders and oil companies may have been looking to exact a little revenge. At a minimum, they were unwilling to take any risk to do a favor for someone who had refused to do favors for them. The New York Times quoted a New York banker as saying, “If it were Exxon or Mobil, all the big banks would rally around it.”

Robert M. Lloyd, Pennzoil v. Texaco, Twenty Years After: Lessons for Business Lawyers, Transactions: Tenn. J. Bus. L. 330, 349-50 (2005) (footnotes omitted).

I’m going to add this to the wounded-tiger post.

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