Texaco Refining and Marketing, Inc. v. Aetna Casualty and Surety Company, Inc.
Opinion
Opinion
Norris, J.
In 1978, appellant Texaco Refining and Marketing Inc. (Texaco) and Oasis Petroleum Corp. (Oasis) entered into a contract obligating Texaco to sell and Oasis to buy oil. Appellee Aetna Casualty and Surety Co., Inc. (Aetna) issued a bond guaranteeing payment for Oasis’ oil purchases under the contract.
On December 5, 1985, Texaco and Oasis executed a Seventh Amendment to the contract. The amendment, which was by its own terms “effective as of October 1, 1985,” restructured Oasis’ past-due obligations for October and November 1985 deliveries. Under the terms of the amendment, Oasis executed two promissory notes totaling $9.4 million. Oasis also wired a $7.2 million cash payment to Texaco on December 4, 1985.
Although Texaco and Aetna discussed the contract modifications prior to the execution of the Seventh Amendment, Aetna never consented to the amendment. Shortly after Texaco and Oasis agreed on the amendment, Oasis defaulted on its note obligations. One month later, Oasis filed for bankruptcy. The bankruptcy trustee sought disgorgement of the $7.2 million which Oasis had paid to Texaco on December 4, 1985 on the ground that the payment was a voidable preference.