Series 6: Lawsuit In 1937, Louis Blaustein and Jacob Blaustein entered into litigation against the majority members of the Board of Directors of Pan American Petroleum & Transport Company and the Standard Oil Company of Indiana. The lengthy, complicated negotiations continued until August, 1954. (See: Giddens, Paul H. Standard Oil Company (Indiana). New York: Appleton-Century-Crofts, Inc., 1955). In 1933, the Blausteins had sold their interest in the American Oil Company to Pan Am, and in exchange became minority stockholders of Pan Am with ownership of 20% of its stock. At that time, Pan Am was owned about 98% by Standard Oil (IN). A contract known as the “Definitive Agreement” (dated February 17, 1933) was signed by the Blausteins and Standard Oil (IN) and Pan Am. The Blausteins were impelled to sell out Amoco and put themselves in this minority position in Pan Am by their desire to become an integrated oil company instead of a merely a selling company dependent upon others for its products. (An integrated company in the oil business is a company with its own crude properties and reserves, its own refineries, its own pipe lines, transportation facilities, crude purchasing organization, and merchandising organization.) Shortly after the contact was signed, it became evident that Standard (IN) was repudiating important parts of the contract. A smaller refinery than originally planned was built; processing was given to a subsidiary of Standard Oil (NJ); Pan Am was prevented from acquiring any crude properties for a period of three years; and a company-specific pipe line was never acquired. The cost of this to Pan Am was about $1,000,000 a year. The suit brought by the Blausteins in the state of New York was an action on behalf of the minority stockholders charging that the majority directors of Pan Am had exploited Pan Am for the benefit of Standard (IN). The suit was not brought on the basis of breach of contract, mainly because it was thought that recovery in a stockholders action was likely to amount to a greater sum. Harry L. Stimson represented the plaintiffs and Ralph S. Harris represented the defendants. The long trial (December 1939 to May 1940) resulted in a victory for the Blausteins. Justice Samuel L. Rosenman, in a 182-page decision, ruled that Standard had violated its fiduciary duty as a major stockholder. Standard appealed the decision. The Blausteins also appealed because more drastic injunctive relief had been denied. On December 19, 1941, the Appellate Division of the New York State Supreme Court by a 3 to 2 vote reversed Rosenman’s decision, sustained the defendants’ appeal, and ordered the complaint dismissed. The Blaustein interests appealed the decision. After seven years of litigation, the suit came to an end when the New York Court of Appeals on July 19, 1944, by a 4 to 2 vote affirmed the decision of the Appellate Division which had ruled in favor of the defendants. In 1945, the Blaustein interests brought suit against Standard (IN) in the Superior Court of Delaware alleging a breach of the “Definitive Agreement” and sought damages of $50,000.000. Motions filed by Standard (IN) were taken to the Supreme Court of Delaware and an appeal was filed with the Supreme Court of the US. In March 1949, the Supreme Court dismissed the appeal for lack of any substantial federal question. In 1951, there were three suits in the Superior Court of Delaware still pending. All the litigation was finally resolved on August 17, 1954, when the Blaustein interests and Standard (IN) reached an out-of-court settlement. Pan Am was merged into Standard (IN), and the Blausteins exchanged their stock in Pan American for stock in Standard, becoming one of the largest stockholders. Amoco became a wholly owned subsidiary of Standard (IN). Jacob Blaustein became a Director of Standard (IN). Series 6 is a large series, artificially arranged. Many of the papers related to litigation in the States of New York and Delaware are arranged in bound volumes. This is printed, dated material listed in the Container List. Other papers include numbered files, photocopies, exhibits, and general documents. In Subseries 3: New York are files shipped to Baltimore by the lawyers and the bulk of the lawsuit proceedings. There is a sequential index for these files as well as an index by subject. The files contain examination before trial testimony, stenographic transcripts, drafts of briefs, memos, lawyers’ notes, accountants’ reports, and other lawsuit data. |