The studies, which had become a major distraction around Getty Oil headquarters, had been undertaken at Getty's adamant insistence. Now it was feared that they would be used to launch a hostile takeover against the company. Somehow, Petersen believed, Getty had to be made to understand that he, too, was vulnerable in a takeover attempt. The trust owned only 40% of Getty Oil. If a raider acquired the 60% not controlled by Getty, the raider could "squeeze" the trust by either locking Getty in as a minority owner or forcing a merger at an unfavorable price. If Getty would only understand this, he would see that his best hope was to align with management, Petersen believed. And perhaps most important, they had to stop Getty from disseminating confidential company information to outsiders.
Gordon Getty's Gamble : Today, Two Giant Oil Companies Fight Over the Remains of Getty Oil, and the Multibillion-Dollar Getty Family Trust Is Tied Up in Lawsuits. That Isn't Quite What Gordon Getty Planned.
To be concluded next week .
The chosen occasion was a private meeting with Getty at the Bonaventure Hotel in downtown Los Angeles on Wednesday evening, Jan. 12, 1983. Petersen, Copley and Bart Winokur, Getty Oil's chief outside counsel since Hays' death, drove over from company headquarters. Tim Cohler, of the Lasky firm, flew down from San Francisco.
It seemed to Getty and Cohler that Petersen was especially tense when they sat down together in the two-room suite that had been booked for the evening--Petersen's jaw seemed locked shut and his lips were tightly pursed. But as Petersen began to speak, Cohler and Getty both recognized that he was doing his best to be gracious.
"You know, Gordon, your father, Mr. Getty, was a very patient man," Petersen said. "He took his time accumulating an equity position in the various companies that ended up becoming Getty Oil. I just think that such patience, in accumulating a control position over time, has proven itself in the past by the experience of your father." He went on to say that if Getty would bide his time, he might eventually creep into control of Getty Oil--with the company's blessing. Soon Petersen was carrying his point further, making it stronger. Getty had yet to say a word. "We need a flat assurance that these studies are at an end," Petersen declared.
"I appreciate everyone's views," Getty finally responded. "I'm glad that the views have been exchanged. I think it's my duty to listen to all the good thoughts that people might have. My father always welcomed people to his estate and listened to their views and then made up his mind as to what was best. And I think that's a way of conducting yourself that can't be criticized. I'm an ethical guy and I know what my duties are, and I'm responsible. But I cannot in good conscience say to you that there has been a complete set of studies made. I cannot yet be sure that the shareholders as a whole would not benefit from further studies."
In his inimitable fashion, Gordon Getty had said "No." He would not end the studies. The mood began to shift. Bart Winokur began to speak up more forcefully. He had been introduced by Petersen as a brilliant lawyer experienced in mergers and acquisitions, and now he began to tell stories from his legal career, stories about hostile takeovers that had arisen in situations similar to this one. He used some of the wild metaphors popular in his trade: By meeting with outsiders, Getty was spreading "blood in the water," Winokur said. By resisting Petersen, Getty was demonstrating to Wall Street that the company was bleeding, and once that blood hit the water, sharks would be sure to gather.
"You should not be doing anything that anyone outside the company could interpret as encouraging them to make their proposals for control of the company," Winokur said to Getty. "You should not be talking to Corby Robertson at all."
Winokur was aggressive. He described in vivid terms a variety of scenarios in which Getty and the trust could be "squeezed" by an outsider who might gain control of those Getty Oil shares not owned by the trust. Over and over, Winokur emphasized the squeeze.
"Don't you realize, Mr. Getty, that you could be the juice?"
"I've had further conversations with Mr. Robertson about his buying the rest of the Getty Oil shares. We could run the company together," Getty said. "What Robertson proposed was a deal where he would buy 60% of Getty Oil's stock, then we would run the company as partners. We didn't discuss exactly how that would work."
"Have you been giving Robertson company information?"
"Yes, I have been reviewing information with him. I have given him some documents. But I don't think it will be used improperly. Mr. Robertson is a gentleman."
"What documents have you given him, exactly?"
"Oh, some general things."
Copley, Petersen, Winokur and even Cohler all told Getty that this was not an issue he was entitled to decide on his own. "A director, if he's acting as a director and not as a shareholder, doesn't have the unilateral right to decide what company information should be made public," one of them said. "The board and management have to deal with that. You have to work through those institutional forums, Gordon."
