-26--26-
The portions of an 82-page damage study produced by the
Raiders prior to April 1988 received in evidence indicate at
least 10 categories of lost revenue and increased expense
suffered by the Raiders as a result of the Oakland lawsuit. The
total loss shown by the report was $25,083,146.99.
Finally, we look to the settlement agreement entered into on
November 10, 1988. The agreement states in part: “The execution
of this Settlement Agreement by the parties is done for the
purpose of settling disputed claims involving the restoration of
lost franchise value and does not constitute an admission of
liability of any party.” Emphasis added.
In Armstrong Knitting Mills v. Commissioner, 19 B.T.A. 318
(1930), the Board of Tax Appeals considered a situation similar
to the one involved here. In Armstrong Knitting Mills, two
lawsuits, one for breach of contract and one for tortious
interference with the taxpayer’s business, were consolidated and
settled. The taxpayer did not include the settlement amount in
income but did disclose the settlement on its return. The
taxpayer contended that the settlement was for injury to
goodwill, and the Commissioner argued that the settlement was for
lost profits. The Board of Tax Appeals stated:
The amount in question was paid to the petitioner
in compromise and settlement of two suits, and there is
no evidence to indicate in what proportion the amount
could be allocated between the actions. Also, there is
no evidence to establish the specific purpose for which
the money was paid, other than that it was paid as a
lump sum in compromise and settlement of the
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