5
Handler withdrew as a partner as of October 31, 1993, and
negotiated a severance agreement. Handler’s agreement (Handler
agreement) dated April 15, 1994, stated in part:
1. $31,868.30 (which represents the unpaid
balance of my contributed Whitman & Ransom capital in
excess of my $71,602.68 outstanding capital loan due to
Chemical Bank) plus all accrued and unpaid interest on
my contributed capital since the date interest was last
paid to me, will be paid to me on or before May 15,
1994.
2. Whitman & Ransom will assume and pay my
capital loan to Chemical Bank as it comes due and
Whitman & Ransom hereby indemnifies and holds me
harmless from any claim of Chemical Bank with regard to
my capital loan. In addition, on or before May 15,
1994, Whitman & Ransom will deliver to me an
unconditional release and discharge by Chemical Bank.
3. All sums which I have previously drawn from
Whitman & Ransom, including without limitation, all
amounts distributed to me in respect of 1993 operations
of Whitman & Ransom will be retained by me. I will
have no further claims against Whitman & Ransom in
respect of 1993 operations, any proceeds of the
liquidation of Whitman & Ransom or otherwise, and
Whitman & Ransom will have no claims against me in
respect of any matters. Simultaneously with the
delivery of the Whitman & Ransom check and the release
from Chemical Bank referred to in the first paragraph,
we will exchange General Releases, excepting only the
Whitman & Ransom indemnity against any Chemical Bank
claim set forth in Paragraph 1 of this letter.
Handler did not receive any payments or distributions from W&R
other than those provided in the Handler agreement. On May 24,
1994, W&R also executed a separate agreement releasing Handler
from any further liabilities.
W&R sent Handler a Form 1065, Schedule K-1, Partner’s Share
of Income, Credits, Deductions, etc., for 1994 and 1996, but not
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