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3. Three computers 2,000
4. 30 percent of the proceeds from 2,800
Archer v. Houseman
5. PAYS’ covenant not to sue 37,739
(litigation settlement)
Total 92,039
For petitioners’ calculation to be valid, petitioner’s stock
in PAYS must have a value of at least $92,039, and the following
provisions in the agreement must have no value or values that
benefit the two parties to the agreement equally: (1)
Petitioner’s agreement to pay the $25,000 deductible for
professional liability claims payments, (2) petitioner’s covenant
not to compete, (3) petitioner’s covenant not to sue, (4)
petitioner’s agreement to indemnify PAYS for claims due to his
departure, (5) petitioner’s agreement to return PAYS’ property
not specifically given to him, (6) PAYS’ agreement to obtain
release or indemnify petitioner with respect to the note to
Chester Young, (7) PAYS’ agreement to indemnify petitioner
against judgments in a pending lawsuit, (8) PAYS’ assignment of
its collection contracts with Liberty and Trinity Counties to
petitioner, and (9) PAYS’ release of petitioner from liability
for the $100,000 line of credit. Petitioners did not establish
that these items have no value or have offsetting values. Thus,
it is impossible to calculate the value of PAYS’ covenant not to
sue.3
3 Petitioners contend that petitioner’s stock was worth
(continued...)
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Last modified: May 25, 2011