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|Subject: J. Hugh Liedtke, 81, Oilman Who Bested Texaco in Court|
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Date Posted: April 01, 2003 2:04:29 EDT
J. Hugh Liedtke, the longtime head of the Pennzoil Company who began his career by drilling scores of consecutive successful oil wells with his partner, George H. W. Bush, and went on to win billions of dollars from Texaco in a dramatic legal battle, died on Friday in Houston. He was 81.
His son Blake said that he had suffered from several maladies for a long time.
Mr. Liedtke was a leading member of a generation of Texas oilmen who turned their jackpots from wildcat wells into large public companies. Like his fellow oilman, T. Boone Pickens, his specialty was buying assets for less than he thought they were worth and repackaging them to make them more attractive to investors.
Early in his career, he engineered one of the first major hostile takeovers when Pennzoil acquired the United Gas Pipeline Company, which was nearly eight times the size of Pennzoil. It was described at the time as a minnow swallowing a whale.
But his biggest triumph came in the courtroom where his legal team convinced a jury in 1988 that Texaco had illegally usurped his handshake deal to acquire an interest in the Getty Oil Company. He ended up with $3 billion that he used to acquire Chevron stock, only to trade that back to the company for lucrative oil and gas properties.
He had earlier turned down a $2 billion settlement offer from Texaco, causing Fortune magazine to ask him if he was the greediest man in the world or needed psychiatric help.
"Maybe both," he answered in the slow, gravelly voice that perhaps deliberately belied his extensive education. He then showed his famous teeth, saying he was prepared to wait for years for more money.
"Maybe now we should sit back a while and see how they like bankruptcy," he told Fortune. Texaco was indeed forced to seek bankruptcy protection.
When he finally got the $3 billion that he considered adequate from Texaco, Mr. Liedtke celebrated with a double cheeseburger and two bottles of beer at a Houston hamburger emporium he favored.
John Hugh Liedtke was born on Feb. 10, 1922, in Tulsa, where his father was a lawyer for the Gulf Oil Corporation. He majored in philosophy and won departmental honors at Amherst College. His thesis was titled "Religion and the Limits of Knowledge in the Philosophies of Hume, Santayana and Dewey," according to the book "Oil and Honor: The Texaco-Pennzoil Wars" by Thomas Petzinger Jr. (Beard Books, 1999).
He spent a year in a shortened master's program at Harvard Business School. Then, like his father, he earned a law degree at the University of Texas in Austin.
While serving in the Navy during World War II, Mr. Liedtke by chance met his brother, William, also a junior naval officer, on Saipan in the South Pacific. They shook hands and agreed that if they both survived the war, they would pursue a business career together.
They began by opening a law office in Midland, Tex., and became involved in the booming oil business. But from the beginning Mr. Liedtke spent more time studying the mechanics of corporations than plotting deals. His son said he thought that an oil company could never be successful just by speculative drilling, but needed to acquire other companies' proven assets.
In 1953, the brothers joined with Mr. Bush to form the Zapata Petroleum Corporation. They drilled a legendary string of 127 oil wells in the sagebrush of West Texas without one dry hole. The Liedtkes severed their business ties with the future president in 1955 but remained friends. Mr. Bush went on to own and operate offshore drilling rigs.
In the early 1960's, the Liedtkes succeeded in a friendly takeover of the South Penn Oil Company, which made the popular lubricating oils sold under the Pennzoil brand name. They renamed the company Pennzoil and merged several other companies into it. In 1966, the Liedtkes captured United Gas.
Mr. Liedtke's wife, the former Betty Lyn Dirickson, died in 1992, and his brother, William, died in 1991. In addition to his son Blake, he is survived by another son, Hugh Jr., of Houston; three daughters, Karen Mark and Kristy Liedtke, both of Houston, and Katy Bade of Louisville, Ky.; and 15 grandchildren.
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