ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, November 6, 1996 TAG: 9611060043
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
DATELINE: NEW YORK
SOURCE: KAREN SCHWARTZ ASSOCIATED PRESS
LESS THAN 10 YEARS AGO, the oil giant found itself in bankruptcy court after being ordered by a civil jury to pay more than $10 billion in damages.
Texaco Inc.'s latest trouble with apparently fast-and-loose behavior comes less than a decade after the oil company wound up in bankruptcy court for not playing by the rules.
The company was hit hard when it lost a lawsuit Pennzoil Co. filed claiming Texaco interfered with a planned merger between Pennzoil and Getty Oil Co.
A Houston jury in 1985 agreed with Pennzoil and ordered Texaco to pay $10.53 billion in damages - the largest civil award in U.S. history to that point.
In 1987, Texaco filed for bankruptcy protection; a year later, Texaco and Pennzoil agreed on a $3 billion settlement that allowed Texaco to emerge from bankruptcy court.
In 1994, Texaco found itself facing another lawsuit. This time, the company was accused of discrimination in a class-action lawsuit brought on behalf of 1,500 black employees.
According to court papers filed in that lawsuit last week, Richard Lundwall, who was then senior coordinator of personnel services in Texaco's finance department, secretly recorded a meeting with other Texaco executives in which they used racial slurs to describe black employees and discussed destroying documents related to the discrimination suit.
Federal prosecutors are apparently considering whether the alleged destruction of documents amounted to a crime. Daniel Berger, an attorney for the plaintiffs in the civil case, said Tuesday that the U.S. attorney's office in White Plains was looking into the case.
``It's my understanding they will take whatever action is deemed appropriate,'' he said.
Marvin Smilon, a spokesman for U.S. Attorney Mary Jo White, said he could not confirm or deny a federal criminal investigation. The New York Times said federal subpoenas had been issued for the audiotapes.
A call to Peter Gass, Lundwall's lawyer, was not returned.
John Franck, an analyst with PNC Institutional Investment Services, said oil companies have very deep pockets and he didn't think the discrimination case, if won, would be a financial hardship for Texaco.
Texaco, based in White Plains, N.Y., earned $1.5 billion for the first nine months of 1996. It earned $607 million in 1995.
Texaco Chairman Peter Bijur has said that if the allegations are confirmed, he is ``both ashamed and outraged.''
Franck said he didn't condone any alleged actions by Texaco, but noted that it was not alone in being a target of criticism. Exxon had come under fire for its Valdez oil spill off Alaska, and the Royal Dutch-Shell Group of Cos. has been for the target of protests for its presence and policies in the West African nation of Nigeria.
LENGTH: Medium: 59 linesby CNB