Getty Oil Trust Dispute Involving Board, Bank of America Co‑Trustee Proposal, and Potential Take‑Private Scheme

hands happy to follow the board’s guidance. But my father had made it clear to Lansing and me that we were to trust our judgment. We should be ready “to vote the management in and out.” Since stockholders elect boards and boards hire managers, that meant to vote the board in and out. No wonder they were concerned. Lansing and I were both boat-rockers. Wouldn't it be safer if there were a corporate co-trustee? These are usually safety-minded banks, and many banks did business with Getty Oil. Concerns rose when Lansing died in 1972. That left me as the sole trustee. I was less obstreperous than Lansing, but also less predictable. Hostile takeovers were common then, where bids are made directly to shareholders rather than cleared through the board. Getty was rich in oil reserves per dollar of share price. It could be a target. Board members tend to feel that they know stockholders’ interests best, and that the angels are on the side of “friendly” or board-approved takeovers if any at all. Stockholders don’t necessarily feel that way. Temperatures rose when | pushed serious study of the possibility of taking Getty private. The idea was to give up our corporate structure to escape the corporate double tax. Management and its investment banker, Goldman Sachs, advised against. I] now think they were right, although my idea had good precedents. | pressed on, unwisely, by trying to convince the Museum to back me. They had better sense. It was time to heal the breach. Marty Lipton of Wachtell, Lipton, a top mergers and acquisitions law firm, represented the Museum. He proposed a moratorium (the “tripartite agreement”) where the Trust, Museum and company would hold the status quo for one year. Harold Berg had retired as chairman of Getty Oil, and Sid was now chairman and CEO. His COO was Bob Miller, a keen petroleum engineer. Harold Berg still chaired the Museum, although Harold Williams was its CEO and main voice. We all signed. But Getty Oil had its fingers crossed. A few days later, the company petitioned the court to appoint a co-trustee. It proposed Bank of America. B of A’s chairman, Chauncey Medberry, sat on the Getty Oil board. Paul and George’s daughters joined the plaintiffs. Chapter 1: Recollections 1/06/16 11 HOUSE_OVERSIGHT_010927