Laurence H. Tribe, a well-known constitutional law scholar, had little time to chat with his students after finishing a lecture at the Harvard Law School on Wednesday, Nov. 18. He had a noontime plane to catch to Washington and he was in a rush.

Tribe was headed for the Securities and Exchange Commission at 5th and D streets NW. There he joined several corporate attorneys in a private meeting with SEC general counsel Daniel Goelzer and SEC solicitor Paul Gonson.

The topic that afternoon, according to several people in attendance, was the biggest commercial dispute in U.S. corporate history -- the $10.3 billion lawsuit between oil giants Pennzoil Co. and Texaco Inc.

At the meeting, Tribe and his colleagues, who represent Pennzoil, urged the SEC lawyers not to intervene in Texaco's last-ditch appeal of the Pennzoil case to the U.S. Supreme Court. The commission, they argued, was "skating on thin ice" by considering such intervention.

When it was over, the Pennzoil lawyers had no indication whether they had prevailed. There was reason for them to be pessimistic -- the SEC had earlier decided to support Texaco's position in the case when the matter was still in the Texas state courts. And when the Texas Supreme Court ruled against Texaco on Nov. 2, affirming all of Pennzoil's huge judgment, the SEC staff met again with Texaco's lawyers, who strongly urged that the commission ask the U.S. Solicitor General to take Texaco's side before the Supreme Court.

The SEC's decision about whether to intervene in the case -- which may be reached as early as this week -- is of critical importance to Texaco, which in recent weeks has come face-to-face with the realistic possibility of its own extinction.

Texaco's hopes that it will obtain complete vindication from the courts now rest almost entirely with the possibility of legal support from the SEC and the Solicitor General's office, according to a number of people closely involved in the case. "The staff {of the SEC} is preparing a recommendation to the commission," said Paul Gonson, the SEC solicitor, who declined to comment on the specifics of his meetings with Pennzoil and Texaco. "Hopefully, that should be done in the next week or two."

It was two years ago last week that Texaco's extraordinary legal troubles began. After a five-month trial, a Houston jury returned its record verdict for Pennzoil, finding that Texaco had improperly interfered with a multibillion-dollar merger contract between Pennzoil and Getty Oil. Now, after a series of unsuccessful settlement negotiations, legal appeals in the Texas courts, a Texaco bankruptcy filing, and charges and countercharges of political influence-peddling, the case has reached its final -- and most desperate -- phase.

Texaco's appeal to the U.S. high court is its last chance to reverse Pennzoil's judgment. And Texaco has no guarantees that the Supreme Court will even hear its appeal. Moreover, a key ruling by a federal bankruptcy judge last week has put all sides in the dispute under intense time pressure, forcing them to make crucial settlement and legal strategy decisions within the next several weeks.

"That {ruling} dramatically changes the situation," said Kenneth Klee, a Pennzoil bankruptcy lawyer.

Texaco finds itself in a race against the clock. In his ruling last week, Judge Howard Schwartzberg, the White Plains, N.Y., bankruptcy judge who oversees Texaco's Chapter 11 case, for the first time permitted Pennzoil and Texaco's creditors to come up with their own settlement plan in the case, whether or not Texaco likes it.

If Pennzoil and the creditors agree on a settlement formula before Jan. 11, a deadline set by the judge, and if two-thirds of Texaco's shareholders then approve the plan in a court-supervised vote, Schwartzberg has indicated he would likely endorse the reorganization, even if Texaco objects.

Texaco's only chance to thwart a forced settlement may lie with its behind-the-scenes legal lobbying in Washington.

If the company can persuade the SEC and the Solicitor General's Office -- which handles appeals to the Supreme Court on behalf of federal agencies -- to support Texaco's appeal, it may persuade shareholders to reject in a vote any proposed settlement favoring Pennzoil. That's because a decision by the Solicitor General's Office to intervene in a Supreme Court case greatly increases the chances that the court will agree to consider the case.

Texaco must first persuade the Solicitor General's Office that pressing federal legal questions are at issue in the Pennzoil lawsuit -- no easy task. Texaco's challenge is complicated by the fact that Solicitor General Charles Fried has decided to recuse himself from the case and has turned the matter over to his deputies. Fried said in an interview Friday that while there was no legal requirement that he recuse himself, he felt "uncomfortable" because he had "personal associations" with a number of lawyers involved in the case.

Texaco's lawyers have recently attempted to arrange a meeting with deputies in the Solicitor General's Office to lobby for support, but they have been told that it is too early to begin such discussions, sources said.

The legal issues involving the SEC are highly technical but potentially decisive. When it took Texaco's side in a brief filed with the Texas Supreme Court, the SEC argued that Pennzoil's alleged contract with Getty Oil was invalid because it violated SEC rules. By an extension of the SEC's logic, Pennzoil's entire claim against Texaco for contract interference could be reversed. (The Texas Supreme Court was apparently unpersuaded by the SEC's brief.)

Texaco is fanning out around Washington to increase its chances of persuading the solicitor general. The company is attempting to interest the State Department, the Defense Department, and others in the administration hoping that each will ask the solicitor general to intervene on Texaco's behalf.

Texaco's immediate problem is that even if the Solicitor General's Office can be convinced to side with the company, its decision is not likely to be announced before a vote of Texaco shareholders on settlement takes place. Texaco is pressing to obtain the earliest possible decision from the SEC and the Solicitor General's office, but lawyers involved in the proceedings say the company's chances are iffy at best.

The intense time pressure on Texaco arises from skepticism expressed by Judge Schwartzberg and others about Texaco's actual chances on appeal to the Supreme Court. Texaco's creditors fear that Pennzoil eventually will have its entire $10 billion judgment affirmed by the high court, rendering Texaco insolvent and jeopardizing the financial interests of stockholders and owners of Texaco's bonds. The creditors, supported by Pennzoil and now by Schwartzberg, are pressuring Texaco to settle the case before the Supreme Court decides whether to grant a hearing.

The settlement formula now under discussion would still permit Texaco to complete its appeal, but at considerable cost to the company. The creditors and Pennzoil are said by sources to be currently negotiating a "base and cap" formula under which Pennzoil would be paid between $1 billion and $1.5 billion immediately, in exchange for Pennzoil's accepting a cap of between $3.5 billion and $4 billion on any award that is ultimately affirmed by the Supreme Court. The range of amounts under discussion has been confirmed by lawyers for creditors and Pennzoil in open court proceedings.

Texaco has expressed interest in the base and cap idea, but the company has said that the numbers under discussion are far too high. Texaco's executives and directors are said by sources to regard the base payment as extortionary. People sympathetic to Texaco point out that even the lowest base payment under discussion by Texaco's creditors -- $1 billion -- would be by far the largest settlement in U.S. legal history. And Pennzoil would be entitled to the money even if the Supreme Court eventually ruled that Pennzoil's claims against Texaco are without merit.

Pennzoil and the creditors argue, however, that Texaco's painful dilemma is of its own making. In a hearing before Judge Schwartzberg last week, the creditors accused Texaco of pursuing a reckless legal strategy that endangered its employes and stockholders.

The creditors said that a settlement of some kind was essential now because if Texaco was allowed to pursue its appeal to the Supreme Court, and then lost, the company and its creditors would have virtually no leverage over Pennzoil in settlement talks. And financial experts retained by the creditors testified that if Pennzoil's full judgment was upheld, Texaco's worldwide operations would quickly collapse.

The creditors' accusations in bankruptcy court about Texaco's recklessness have contributed to the settlement pressure on Texaco. The Solicitor General's Office won't announce any decision to side with Texaco in the Supreme Court until Texaco actually files its appeal petition with the court, something Texaco hasn't done yet. (The company has until early February to file a petition.) Now, if Texaco rushes its appeal petition to Washington, attempting to encourage quick support from the SEC and the Solicitor General's Office, the company will invite more creditor criticism that it is pursuing a no-holds-barred appeals strategy, rather than seriously considering settlement.

So Texaco is expected to hold off on its petition filing until January. That would still make it possible, in theory, for the Solicitor General's Office to announce its intervention before Texaco shareholders vote on a Pennzoil-sponsored settlement. Such a quick announcement, while not unprecedented in the history of the Solicitor General's office, would be a rare break with tradition, lawyers said.

Another factor is the presence of TWA Chairman Carl Icahn, who has acquired a large block of Texaco's stock and also a substantial number of Pennzoil shares. Icahn and J. Hugh Liedtke, Pennzoil's chairman, have known each other for years and have contemplated joining for business transactions in the past, according to two sources. Pennzoil understandably views Icahn as a strong positive force for settlement.

Amid all of this complex maneuvering, Texaco is planning for the worst. The company's lawyers are prepared to challenge Pennzoil's judgment in bankruptcy court even if the verdict is affirmed by the Supreme Court. Such litigation could drag on for years. Bankruptcy experts say that under such a scenario, Pennzoil would be unlikely to obtain its full $10 billion judgment, but Texaco would almost certainly be financially wrecked by the proceedings.

In the event it is forced to pay a large sum to Pennzoil, whether in settlement or in litigation, Texaco may also file its own lawsuits against other parties in the ill-fated Getty Oil deal, such as former Getty directors, major shareholders, and the Wall Street investment banks that brokered the merger. The lawsuits would attempt to recover Texaco's losses from some or all of those parties.

According to sources, Texaco has retained a retired federal judge, Joseph Morris, to examine the liability of individuals and institutions involved with Texaco in the Getty deal. Morris has conducted private interviews in recent months with many of the people who participated in the Getty merger and he has made interim reports to Texaco's board of directors, sources said.

But Morris, the sources said, has not yet offered any final recommendations to the Texaco board.