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1995, concerning the proposed settlement. During that weekend,
Frank Wheaton also spoke with Riley and Worthy and, separately,
with Wodlinger. As a result of those conversations, a consensus
was formed among the various attorneys and Frank Wheaton to make
a counteroffer to the Government’s proposal contained in the
November 3 letter; the counteroffer was to be 75 percent of the
amounts proposed by the Government. Frank Wheaton and his
attorneys realized, however, that the Government might not accept
that counteroffer. On the morning of Monday, November 6, 1995,
before speaking by telephone with Garofalo, Gilson telephoned
Frank Wheaton and asked for instructions if the Government were
to refuse the 75-percent counteroffer. Frank Wheaton instructed
Gilson that, in that circumstance, he was to proceed and take the
Government’s number. Frank Wheaton answered “yes” when Gilson
asked him if he realized that there would be a $40 million
judgment. Although there had been a discussion among the
attorneys and a discussion between the attorneys and Frank
Wheaton regarding Frank Wheaton’s inability to pay $40 million
and the possibility of negotiating some final payment obligation
for both the docketed cases and other years under examination
(but not yet petitioned to the Tax Court), Frank Wheaton did not
attach any condition to his instruction to Gilson that, if the
Government would not compromise, he was to take the Government’s
number.
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