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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: shades who wrote (59551)	4/26/2006 1:06:58 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 110194

Texaco and certain leaders of Ecuador created a gigantic environmental mess in Ecuador between 1972 and 1992. Texaco was sued in 1998 in Ecuador, by the indigenous people in the Amazonian area of Ecuador, over the mess they left behind. The collective lawsuit is known as "Maria Aguinda et al. v. Texaco". Texaco's response was to file "motions to dismiss" in January 1999. In October 2001 Chevron agreed to acquire Texaco, being fully aware of the lawsuit which had been ongoing for three years over Texaco's operations which had ended eleven years earlier. Most of the damage was already entered into evidence, so everyone had a very good idea of the magnitude of the problem. In buying Texaco, Chevron knew that an equitable price for a final settlement would cost something in the neighborhood of $1.5 billion. Immensely more than anything Texaco could have saved by their shabby operating procedures. The final settlement is currently being determined by the Ecuadorean court. The Ecuadorean government will likely be liable for a portion of the settlement. Ideally, Chevron would not have purchased Texaco until the lawsuit was settled, but Texaco owned the other 50% of Chevron's global Cal-Tex operations and other firms, firms even worse than Texaco which Chevron did not want to be in business with, were already trying to purchase Texaco and their Cal-Tex stake. .