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7. Corporation will assume, by novation if possible,
SBA loan in the amount of $58,000 (if novation not
possible, Kathy and Kerry Dawes will hold Appellant
harmless by appropriate agreement.)
8. Appellant will transfer all shares of stock in the
corporation to the corporation or Kerry Dawes.
9. The formal agreement to be structured to result in
the least amount of tax liability legally possible for
the Appellant; to the extent that the settlement
agreement reached does result in tax liability to the
Appellant, the agreement will be structured, if
possible, to the Respondent's tax benefit. For
example, in the event the sums being paid would result
in Appellant paying taxes on $60,000, then the
Respondent would have the right to place in the
agreement a covenant not to compete to that extent.
10. Appellant agrees to dismiss the Shasta County
action in which an OSC is pending, and this appeal,
when a final settlement agreement is executed; each
side to pay its own costs and the remittitur to go down
forthwith.
11. Corporation or Dawes to retain all rights pursuant
to two assigned agreements dated November 12, 1980.
Subsequent to December 12, 1989, there were additional
negotiations concerning the terms and structure that the eventual
settlement agreement would take. Subsequent to the December 12,
1989, settlement conference, Mr. Lopez, as counsel for petitioner
Dawes, and Mr. Murphy, as counsel for petitioner Praegitzer,
engaged separate tax counsel for advice on how to structure an
agreement pursuant to the 12/12 agreement. Mr. Lopez consulted
Howard Schweitzer, and Mr. Murphy consulted Kevin Schoneman.
Mr. Schoneman proposed a structure involving payment of
$103,000 by petitioner Dawes and transfer of Ameritech assets
from Ameritech to petitioner Praegitzer, as outlined in a
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