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partners in the other partnerships. The preamble of the
Settlement Agreement also refers to a list of proceedings
“pending in the United States Bankruptcy Court for the
District of Arizona.” It appears that the list of bank-
ruptcy proceedings includes proceedings filed on behalf
of seven of the nine partnerships involved in the
consolidated cases herein.
Under the Settlement Agreement, an investor is given
until December 31, 1989, to elect one of two options. The
first option provides as follows:
Commencing on the later of (i) January 1,
1990, or (ii) the effective date of any enacted
statutory provisions amending the Internal
Revenue Code to provide for preferential
treatment with respect to the gain arising from
the sale or exchange of a capital asset, the
Investors’ shall abandon their interests in the
JNC Partnerships by conveying them to the
Trustee, and thereafter, the Investors’
promissory notes that are the subject of claims
by Admiral against the Investors or are other-
wise held by Admiral shall be returned to the
Investors. The return of the Investors’
promissory notes is intended as a purchase price
reduction within the meaning of I.R.C. Section
108(e)(5). * * *
The second option provides as follows:
Immediately after the conclusion of the
bankruptcy proceedings, the Investors shall
convey their interests in the JNC Partnerships
to the Trustee; and all promissory notes executed
by the Investors that are the subject of claims
by Admiral against the Investors or are other-
wise held by Admiral shall be returned to the
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