This Day In Market History: Pennzoil Wins Record Settlement From Texaco

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened

On Nov. 19, 1985, Pennzoil won the largest civil suit at the time with a $10.53 billion settlement against Texaco.

Where The Market Was

The S&P 500 closed down at $198.67, and the Dow Jones Industrial Average finished the session down at $1,438.99.

What Else Was Going On In The World

President Ronald Reagan met with Soviet General Secretary Mikhail Gorbachev for their first in a series of diplomatic summits. The next day, Microsoft Corporation MSFT would debut its original Windows 1.0 system.

Pennzoil Wins Biggest U.S. Civil Suit

In the largest civil settlement at the time, Texaco was ordered to pay Pennzoil $10.53 billion in damages, plus interest, for deliberate interference in the binding merger agreement between Pennzoil and Getty Oil. Texaco had acquired Getty for $10.1 billion the year before in what was then the nation’s second-largest merger in history. The resulting trial included four months of testimony.

The ultimately $11.1 billion payment sent Texaco — the third-biggest oil company in the U.S. — into bankruptcy. After nearly a year in that state, and having paid Pennzoil $3 billion, Texaco was subsumed by Chevron Corporation CVX.

Previously, MCI held the settlement record with $1.8 billion awarded in a 1980 antitrust suit against AT&T Inc. T. That judgment was subsequently repealed by an appeals court, though.

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