Two major events played a significant role in shaping the Getty's institutional capability in the mid-1980s. In January 1984 Texaco outbid Pennzoil for control of Getty Oil. The bidding nearly doubled the value of the stock bequeathed to the Trust, raised the value of the endowment to just over $2.3 billion by December 1984, and dramatically expanded the range of opportunities available to the Getty in the future.

The battle between Texaco and Pennzoil, however, produced a gargantuan lawsuit when Pennzoil accused Texaco of having intervened in a completed deal. The Trust's president and trustees became embroiled in this lawsuit, and a cloud of financial liability hung over the Trust for several years. The cloud grew especially dark in November 1985, when a lower court awarded Pennzoil $11.1 billion for damages.

Fortunately, as part of the deal with Texaco, Harold Williams had requested indemnification. Texaco wavered on this commitment but ultimately honored the deal, and the Trust was not liable for any of the $3 billion in settlement that Texaco eventually agreed to pay Pennzoil in 1988.

VIDEO—Harold Williams
Though it was not part of the plan, Harold Williams' background as a lawyer and chairman of the Securities and Exchange Commission proved critical when Texaco and Pennzoil began bidding against each other to acquire Getty Oil. Williams talks about the deal from his perspective as a member of the boards of Getty Oil and the J. Paul Getty Trust.