Bankruptcy Filing Called Hard To Overthrow
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LEAD: The Pennzoil Company is unlikely to succeed if it tries to challenge Texaco Inc.’s filing under the Federal Bankruptcy Code, lawyers and bankruptcy experts said yesterday. The Pennzoil Company is unlikely to succeed if it tries to challenge Texaco Inc.’s filing under the Federal Bankruptcy Code, lawyers and bankruptcy experts said yesterday. Pennzoil denounced Texaco Sunday for what it called improper use of Chapter 11. The company asserted that Texaco showed ”arrogance and disregard for the whole judicial process” in using bankruptcy proceedings to avoid a Texas requirement that it post a $12 billion bond while it appeals the verdict Pennzoil won in a Texas court. But many legal experts said yesterday that bankruptcy law, which once might have discouraged a filing by a still-solvent corporate giant, has changed radically in the last decade. Now, they said, a liberal attitude prevails toward companies that say they need help. Bankruptcy is no longer reserved for failing companies, they said, and the Texaco filing is likely to be approved by the courts if Pennzoil raises objections. Pennzoil could ask the bankruptcy court to dismiss Texaco’s bankruptcy petition. More : query.nytimes.com |