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3. Bagley hereby agrees to return forthwith to IBP all
documents previously in Bagley's possession and generated by or at
IBP in the course of its business except those which are
identified as personal to Bagley.
4. The parties will file forthwith a stipulation of
dismissal of IBP's pending cause of action against Bagley, case
number C 77-4040 in the United States District Court for the
Northern District of Iowa, Western Division.
5. The parties will file forthwith a stipulation of
dismissal of Bagley's causes of action pending against IBP, case
number C 79-4087, in the United States District Court for the
Northern District of Iowa, Western Division.
6. Both parties agree to exercise their best efforts to
avoid public disclosure of the settlement terms hereof including
this document itself, except as may be by law required.
7. This release is executed as a compromise settlement of
disputed claims, liability for which are expressly denied by the
party and/or parties released, and this release does not
constitute an admission of liability on the part of either party.
8. This release and settlement agreement contains the
entire agreement between the parties and the terms hereof are
contractual and not a mere recital.
Pursuant to the settlement agreement, IBP paid petitioner $1.5 million
by check dated September 8, 1987. The invoice for the check indicated the
check was issued for "settlement". The check was deposited into Mr. Rawlings'
firm's trust account, and the funds were then distributed out of the trust
account.
Prior to the filing of the Bagley suit, Mr. Rawlings had a flat hourly
fee arrangement with petitioner for an hourly fee of $75 for certain work, and
$85 for other work, with respect to the defense of the IBP suit. After the
Bagley suit was commenced, Mr. Rawlings and petitioner changed the fee
agreement arrangement to a hybrid basis whereby Mr. Rawlings would receive a
fee of $50 per hour, plus 25 percent of any judgment or settlement received in
the litigation. Petitioner was to pay all expenses incurred in the
litigation. During the year 1987, petitioner paid a total of $768,484.87 in
legal fees and costs in connection with the IBP litigation. This amount was
composed of $378,426.39 paid in connection with the judgment petitioner
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