Gordon Getty's Last Laugh

...If the public has reason for worry, it is because the executives at the head of multibillion-dollar corporations appear much more absorbed in rearranging capital assets than in managing the creation and distribution of products...

...Instead, bureaucrats andjudges, at the taxpayer's expense, spend much of their time allocating future profits among members of the private sector...

...Gordon, a composer and musician who had evidenced little interest in business affairs and was known for his erratic behavior, demanded a prominent role on Getty's board...

...This otherwise routine takeover contest went down in history when Pennzoil sued for breach of contract and, due in good part to the ineptitude of Texaco's lawyers, won a $10.53 billion judgment, the largest in American history...

...But even as the author leads us through an astonishingly complex web of corporate intrigue, he offers no reason why, aside from curiosity about the shenanigans' of the rich and famous, anyone on the outside should care about the issue at hand...

...Themuseum's block was pivotal: By joining with the public shareholders to accept a buyout, Williams could suddenly reduce the Sara C. Getty Trust to a minority owner of a company controlled by someone else...

...Never in the nearly two years Coll chronicles do we hear Getty Oil's managers discussing the exploration, production, refining, or marketing of petroleum...

...When the Sara C. Getty Trust sold its shares to Texaco in January 1984, they fetched $125 each...

...The answer, I think, lies less in what is in this book than in what is missing...

...Never do we see Getty's board inquiring about the state of the business...

...His mercurial nature, his inability to make business decisions, his constant interference in corporate affairs earned him no sympathy...

...This colorful, wellwritten account uncovers enough to satisfy the most voyeuristic observerof the business world...

...His meetings with oil executives, investment bankers and stock market analysts, ostensibly designed to help educate him about operating a major oil company, could not help but create the impression that Getty Oil Company was up for grabs...

...These hard-boiled executives had nothing but disdain for Gordon Getty...

...if the Court agrees, most knowledgeable observers believe the decisions in favor of Pennzoil will be thrown out...

...What is missing is any sense of what most of us naively would have thought to be the purpose of the industry...

...Shortly afterward, Getty changed its mind and succumbed to a $125-per-share offer from Texaco...

...By the standards of the men he was playing with, Gordon Getty won...

...Conversely, Gordon Getty's ambitious plans to restructure the company could not go far unless Harold Williams concurred...

...Reviewed by Marc Levinson Editorial director, "The Journal of Commerce" The Reagan Revolution notwithstanding, government in all its manifestations is ever more involved in deciding which capitalists will emerge victorious from the battle of the marketplace...

...When Gordon Getty began discussing the restructuring of the Getty Oil Company in the fall of 1982, its shares were worth about $50 apiece...

...There were, however, complications...

...Texaco is now in bankruptcy proceedings, its future endangered by what Coll makes clear is the incomprehensible decision of a jury in favor of a plaintiff whose case had no legal merit...

...Financial gamesmanship, not profits arising from operations, is the universal obsession...

...J. Paul Getty Jr., who built his father's small oil company into a corporation with assets of nearly $4 billion before dying in 1976, gets short shrift here, and that's reasonable: His colorful career has already been amply chronicled in Robert Lenzner's The Great Getty...

...Texaco is now petitioning the United States Supreme Court to hear the case...

...That award, reduced slightly on appeal, was reaffirmed by the Texas Supreme Court this month...

...But Coll's unflattering portrait makes it all too easy to forget one important fact...

...He put forth a series of ill-conceived proposals intended to maximize the value of the Getty trust, whose income and assets were to benefit J. Paul's various descendants...

...One finishes this book wishing that Getty, Pennzoil, Texaco, and their respective investment bankers would simply destroy each other quietly and leave the rest of us alone...

...Then there were the stockholders to consider...

...In no case is that attitude more understandable than in the bloody and expensive struggle over what used to be the Getty Oil Company...

...By February 1983, when Gordon received a phone call from takeover artist T. Boone Pickens, it was...

...A pox on all your houses...

...He was unanimously regarded as a rank amateur meddling in affairs beyond his ken...

...The public-spirited citizen may be excused for wondering why any of the firms participating in such exercises is particularly deserving of favor...

...It's a great read...

...The only semblance of concern we observe about the mundane job of running a company comes from Pennzoil and Texaco, and both firms decide in the end that buying Getty Oil's petroleum reserves is cheaper than drilling for oil on their own...

...In December 1983, Getty Oil agreed in principle to a buyout proposal—not from Pickens but from Pennzoil, for $120 per share...

...Finally, there was the J. Paul Getty Museum, to which the elder Getty willed 12 per cent of the corporation's shares upon his death...

...The limits on Gordon Getty's discretion in managing assets of over $1.5 billion at the time of his father's death were real...

...After the 1982 death of J. Paul's longtime attorney Lansing Hayes, Gordon Getty, then 49, emerged as sole trustee of the Sara C. Getty Trust, the corporation's major shareholder...

...Some 48 per cent of Getty Oil's shares were in public hands, and the company was bound by all of the laws governing the operation of publicly-held corporations...

...Coll performs an extraordinary job of reconstructing the tense jockeying between Getty Oil's management, Gordon Getty, other Getty kin, and the museum during the months following Pickens' proposal to merge Getty Oil with his own Mesa Petroleum...

...What, aside from the massive amounts of money involved and the debatable quality of justice in Texas courts, makes the taking of Getty Oil a matter of public interest...

...The outlines of the story are widely known, and in The Taking of Getty Oil Steve Coll goes far to fill in the details...

...Yet whether the issue involves distributing defense contracts, bailing out the savings and loan industry or obtaining a court order blocking a hostile tender offer, it is hard to discern a genuine public interest within many of the economic matters that land in the government's lap...

...The corporation's board, powerless to rein in its biggest shareholder, was a helpless bystander in the ongoing battle between Gordon and Getty Chairman Sidney Petersen—a battle that, from this account, must have left Petersen's management team no time to oversee the business...

...The museum was headed by Harold Williams, a man known less for his expertise in art than for his tenure as chairman of the Securities and Exchange Commission...

...Gordon demanded study after study of ways to "enhance shareholder value," a task accomplished simply by allowing word of a possible restructuring to leak out into the market...

...First off, Gordon Getty didn't actually own Getty Oil—the trust he headed controlled only 40 per cent of the company's stock, and was prohibited from selling it unless faced with a substantial loss...

...is not an irrational reaction in the age of corporate socialism...