(Rand Journal of Economics, 1988) Cutler, David; Summers, Lawrence H.
This article demonstrates that the dispute between Texaco and Pennzoil over the Getty Oil
takeover reduced the combined wealth of the claimants on the two companies by over
$3 billion. During the course of the litigation, Pennzoil's shareholders gained only one-sixth
as much as Texaco's shareholders lost. When the litigation was settled, about two-thirds of
the loss in wealth was regained. These fluctuations in value exceed most estimates of the
direct costs of carrying on the litigation, and may reflect the disruption in the operations of
Texaco caused by the dispute.
