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represents consideration for petitioner's signing the release, we
will look to the intent of the payor (PepsiCo) to determine what
portion was paid for petitioner's release of his claims.
At trial, Mr. Dickie, PepsiCo's representative in the
transaction, testified that the amount paid to petitioner was
based solely on PepsiCo's valuation of the PMI corporation.7
Mr. Dickie testified that the amounts paid to petitioner related
only to the value of the PMI stock, and no amounts were paid for
the release of claims obtained by PepsiCo. Mr. Dickie indicated
that it was a normal business practice to obtain a general
release from all sellers in these types of situations.
We cannot accept this testimony at face value. The evidence
before the Court belies Mr. Dickie's assertion that no amounts
were paid for the settlement of claims. First, the release is
not merely a general release of claims. Rather, the release
specifically identifies petitioner's claims asserted against
PepsiCo and Pizza Hut in the action pending in Sedgwick County
District Court. Second, it is evident from the documents
presented at trial that PepsiCo would not have purchased peti-
tioner's stock in PMI without also receiving his release of
claims. It is apparent that PepsiCo paid petitioner $3,250,071,
7In his testimony Mr. Dickie explained that a retail food
franchise is usually valued based on either a percentage of sales
income or a multiplier of income before depreciation and taxes.
According to Mr. Dickie, these methods were applied to PMI in
order for PepsiCo to arrive at the $8.25 per share price paid by
PepsiCo to petitioner.
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