Like many oilmen, Anschutz took on partners to spread the risk of developing new fields. One of them was Ablah, the Wichita real estate baron.
The Little George Oil Co. -- named for Ablah's diminutive stature -- and the Anschutz Corp. entered into a partnership in 1985 to explore undeveloped oil and gas leases in Idaho. But after several deep holes turned up dry, the venture went bust.
Ablah had paid $14.5 million upfront. Anschutz sued him in 1989, saying Ablah owed him an additional $2 million plus $900,000 in interest.
Ablah countersued, contending in court papers that he had "relied upon the truthfulness and integrity of Philip Anschutz." Ablah claimed that Anschutz had withheld information that the exploratory wells were extremely high-risk.
"He had suckered me," Ablah said. "I'm a big boy. I didn't deserve the $14 million back." But when Anschutz demanded more, Ablah said, he lost respect for the Denver billionaire.
"He didn't quite treat me fair, and he wasn't quite honest," Ablah said.
The case went to trial July 24, 1990, in Denver District Court. On the first day, Anschutz testified that he had warned Ablah many times that the project was "a 1,000-to-1 shot."
The next morning, the Denver Post carried a front-page photo of the rarely seen Anschutz rushing from the courtroom.
Before taking the stand that day, Anschutz made Ablah a surprise settlement offer, and the case was dismissed. The terms were confidential, but a copy of the settlement obtained by The Times shows that Anschutz dropped his demands and paid Ablah $750,000 for his drilling rights.
"Who was right and who was wrong meant less to him than his loss of privacy," spokesman Monaghan said. He added that several factors led Anschutz to settle, including disruption to his business, the cost of litigation and unwanted media attention.
The Ablah lawsuit was not the first or last time Anschutz paid off claims brought by oil partners.
In 1975, a Denver-based petroleum firm that lent Anschutz $540,000 as part of an exploration deal in Pakistan claimed that he failed to repay the money. The company sued and, in a settlement, recovered most of the funds.
In other cases, Anschutz was ordered to pay back a $20-million loan to a pipeline company and $33.5 million in royalties to Amoco Oil and other owners in 1994 as part of the Anschutz Ranch East discovery.
Anschutz also tangled with Amoco over whether his firm owed $625,695 to settle claims from a 1989 explosion and fire at a gas processing plant that killed a contractor and injured 11 workers. Anschutz eventually paid, say sources familiar with the outcome, but not before Amoco characterized their dealings in a court complaint.
"Over the past eight years, Anschutz has employed a myriad of stall tactics to delay certain substantial payments in other settings," wrote Amoco attorney Timothy Beyer in June 1993. "Its position has been to baldly refuse to pay its obligations.... "
Railroads
Anschutz amassed one of the largest fortunes in the modern history of the railroad business.
He saw an opening when the U.S. government deregulated the railroads in the 1980s. Anschutz believed that a consolidation of transcontinental lines was inevitable, and he wanted a piece of the action.
In 1984, he bought Rio Grande Industries, parent of the ailing Denver & Rio Grande Western Railroad, for $500 million. Anschutz paid $90 million in cash and borrowed the rest. Four years later, he merged it with San Francisco-based Southern Pacific Transportation Co. for about $1 billion, most of it borrowed. He also assumed $780 million in Southern Pacific debt.
Southern Pacific was nicknamed the "Sluggish Pacific" because it was hemorrhaging cash and saddled with aging locomotives. Shortly after the merger, the railroad giant was losing $400,000 a day.
It marked the second crisis in Anschutz's business career.
"Everyone thought he would eventually bleed to death," Leiweke said. "He bled a lot ... but he turned it into something."
To stave off bankruptcy, Anschutz sold a slice of the merged railroad to a Japanese shipping line, invested in new equipment and generated $2.2 billion by selling hundreds of parcels of surplus real estate.
The properties included downtown L.A.'s Union Station and 177 miles of rail lines that now carry commuter trains to Los Angeles from Orange County, San Bernardino, Simi Valley and Santa Clarita.
One of the most sought-after assets was the Southern Pacific line along Alameda Street. The cities of Long Beach and Los Angeles needed the right-of-way to build the Alameda Corridor, a high-speed 20-mile cargo expressway connecting their ports to downtown rail yards.
Steve Dillenbeck, then the director of the Port of Long Beach, recalled the first time that local officials met Anschutz over lunch near Pershing Square. After everyone was seated, Anschutz walked in sporting a large silver belt buckle.
"He didn't say a heck of a lot," Dillenbeck said. "It was staged very much to show that he is a little extraordinary."
