A Small Price to Pay

Texaco will give Pennzoil $3 billion to end a historic row

For nearly four years, Texaco and Pennzoil have been corporate America's equivalent of Iran and Iraq, fielding armies of lawyers to pound each other with salvos of briefs and appeals. Last week the war came to an end. Both sides announced that they had reached an agreement to settle the historic dispute that drove Texaco into bankruptcy court and has already generated about $100 million in legal fees, with more sure to come.

Under the deal Texaco will pay Pennzoil $3 billion. That is far less than the $10.5 billion penalty that a Texas jury ordered Texaco to give Pennzoil in...

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