2. In 1986, a Texas jury awarded the Pennzoil Corporation $12 billion after deci

Question

2. In 1986, a Texas jury awarded the Pennzoil Corporation $12 billion after deciding that Texaco had illegally interfered with Pennzoil's takeover of Getty Oil Company. The U.S. Supreme Court had agreed to hear an appeal in 1988. In 1987, Pennzoil offered Texaco a binding out-of-court settlement that required Texaco to make a payment to Pennzoil of $5 billion, and forgo any further court appeals to obtain the $12 billion ruling already made in favor of Pennzoil. Texaco refused this out-of-court settlement offer. Assume Texaco's options were only (1) to wait for the Supreme Court to rule on the case, or (2) to accept Pennzoil's $5 billion settlement. Assume further that if Texaco waits for the Supreme Court to act, the ruling will be either a reversal or an upholding of the earlier judgment.

Explanation / Answer

if teh texaco agrees for the out of court payment cost incurred =5 billion they offered a 7 billion concession and texaco refused it even after the negative side so they are possibly inferring that the judgement may come in favour of texaco. cheeers :)

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