Placid Oil Company
Oil company of H.L. Hunt's first family trusts, pledged to banks after the 1980 silver collapse, which sued its 23 lenders, filed for bankruptcy in New Orleans, and was sold to Occidental in 1994.
Placid Oil Company was formed in 1935 as successor to H.L. Hunt, Incorporated, with its shares placed in trusts for the six children of H.L. Hunt and Lyda Bunker Hunt. Its sister company, Penrod Drilling, operated the family's rigs. By the 1980s Placid was owned in equal parts by the trust estates of Nelson Bunker Hunt, William Herbert Hunt, and Lamar Hunt.1
Black Lake
Placid discovered the Black Lake field in Natchitoches Parish, Louisiana, in the mid 1960s. A landman hired in 1965 "upon the discovery of the Black Lake Field," Billy Bledsoe, became "the Special Representative of the legendary oilman, H.L. Hunt" in 1970 and after 1974 "the International Negotiator for Nelson Bunker Hunt," with assignments in Libya, in Iran, where they involved the family of the Shah, and in Britain, Australia, New Zealand, and Canada.2
The Banks
After the silver market broke on March 27, 1980, a consortium of banks lent Placid 1.1 billion dollars against the family's oil properties, guaranteed personally by the three brothers, in an arrangement that Paul Volcker of the Federal Reserve defended to Congress. By 1986, with oil prices falling, Placid and Penrod together owed 23 banks 1.5 billion dollars. The lead defendants in the litigation that followed were Bankers Trust and Manufacturers Hanover.34
In the summer of 1986 the two companies and the three trust estates sued the banks in the federal court in Dallas, alleging fraud and a conspiracy to take over the offshore drilling business, and demanding damages reported at 15 billion dollars. The banks counterclaimed for the loans. Judge Barefoot Sanders declined to stop foreclosure, finding that the Hunts had "an adequate damage remedy." Interest was accruing at 230,461 dollars a day. The properties posted for foreclosure included 286 acres in Richardson, Texas, the family's interest in Thanksgiving Tower in downtown Dallas, and a gas plant in Chambers County. A spokesman said: "We do not intend to let the banks dismantle Penrod and Placid. The companies are responsible for 20,000 workers."35
An agreed order of August 15 required the Hunt parties to obtain the Dallas court's approval before seeking bankruptcy protection. On August 29 Placid, a subsidiary, and the William Herbert Hunt Trust Estate filed Chapter 11 petitions in the bankruptcy court in New Orleans without it, arguing that their principal assets were in Louisiana. The Dallas court ordered the petitions transferred to Texas on September 4, and the Fifth Circuit affirmed on September 15. Placid's five largest trade creditors were Brown and Root, American International Underwriters, Marathon LeTourneau, McDermott, and Hamanaka Chain Trading of Japan. A plan of reorganization was confirmed on September 30, 1988.35
Sale
Occidental Petroleum acquired Placid on December 29, 1994, for about 250 million dollars in preferred and common stock. The assets were reserves of 12 million barrels of oil and 242 billion cubic feet of gas on the Gulf Coast and in the Netherlands, and a 39 percent interest in a 170-mile gas pipeline system in the Dutch sector of the North Sea with thirteen licenses there.6
Sources
- Palmer, Jerrell Dean. "Hunt, Haroldson Lafayette," Handbook of Texas Online, Texas State Historical Association. https://www.tshaonline.org/handbook/entries/hunt-haroldson-lafayette ; Hunt v. Bankers Trust Co., 799 F.2d 1060 (5th Cir. 1986), naming the three trust estates as the Hunt parties. ↩
- "Billy Bledsoe," obituary, The Dallas Morning News, December 2018. ↩
- Hunt v. Bankers Trust Co., 799 F.2d 1060 (5th Cir. 1986). ↩
- McFadden, Robert D. "Nelson Bunker Hunt, 88, Oil Tycoon With a Texas-Size Presence, Dies," The New York Times, October 22, 2014. ↩
- United Press International, dispatch on the Placid Oil bankruptcy filing, August 29, 1986. ↩
- Occidental Petroleum Corporation, Form 10-K405 for the fiscal year 1994, Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/797468/0000950148-95-000114.txt ↩
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