Interesting gossip out of the classic rock world today: apparently Steely Dan producer Greg Katz once had to fire the Eagles’ Don Henley from tracking vocals on Steely Dan’s 1977 hit “Peg.” And it’s still awkward.

Speaking to Ultimate Classic Rock, Katz talked about how both Steely Dan and the Eagles were tight, as they were both managed by Irving Azoff. “In the chorus, the backgrounds are sort of the lead,” Katz said. “It wasn’t like a [usual] background part.” And while the song was originally coming together, Katz and Donald Fagen talked about how they “both liked Henley’s singing. ‘Why don’t we call Henley and Linda Ronstadt? Maybe that would be cool and something different.’ So, I called Irving … Linda wasn’t feeling well, so Nicolette Larson came.”

But when Henley went to learn the part and sing, it sounds like the chemistry just wasn’t there. “There wasn’t patience as much as instant reaction of the realities of the moment,” Katz said. “We didn’t jerk people off by letting them think it was going to work and have them sit for two hours. When we knew it wasn’t going to be OK, Fagen would tell me to end it. So they sang it again, and it was no good.”

Soon after, Fagen apparently went to go get a sandwich with bandmate Walter Becker, before which Fagen told Katz: “Oh, fire them.” Recalling the experience, Katz said, “Which I did — and have heard about for 35 years since, in various ways.”

Katz added: “The last time I saw Henley, he sidled up to me … and he said, ‘Are you going to fire me again today, Katz?’ But he didn’t smile when he said that.”

It was “a difficult day at the office,” Katz added, “because, like [Fagen and Becker], I was part of that inner-circle crowd. We were all in the same little area. We lived in the same place and had the same manager. It was always Eagles and Steely Dan for a long time in L.A.”

Anyway, Michael McDonald was brought in to do the backing vocals, and “Peg” became what it is today. Henley would later join Steely Dan for “FM (No Static at All)” (along with Glenn Frey and Tim Schmit), so I guess it’s safe to assume that Fagen and Becker remained on good terms with Henley in the end.