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Washington, D.C., and expressed doubt as to the persuasiveness of
certain of their key arguments. Frank Wheaton told Gilson and
Wodlinger that he would not appear or testify at trial. Gilson
informed Frank Wheaton that he was the principal witness in about
90 percent of the issues in the cases and that, without him,
Gilson and Wodlinger had no chance. Gilson informed Frank
Wheaton that, if he did not testify, there would be a default and
a judgment for $41 million--“$40 million against you
[personally]”. Frank Wheaton again said that he would not show
up for trial. He said that he did not have $40 million, he was
not spending any more money, and he was getting back to business.
Frank Wheaton instructed Gilson and Wodlinger to get a settlement
number from the Internal Revenue Service (IRS). He did not
instruct Gilson and Wodlinger to set any conditions on the
settlement.
On the morning of November 3, 1995, Gilson and Wodlinger met
with Garofalo and Chief Special Trial Judge Panuthos. Gilson
advised Garofalo that Frank Wheaton wished to settle the cases.
Garofalo told Gilson that (1) he would prepare a settlement offer
based on the amount of tax and penalties for which respondent
believed petitioners were liable, (2) respondent would only
settle the instant cases if Gilson submitted to respondent
written settlement documents prior to 11:00 a.m., on Monday,
November 6, 1995, and (3) he had no authority to settle any
dispute with Frank and Mary Wheaton for 1991, a year not then
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