Estate of Algerine Allen Smith, Deceased, James Allen Smith, Executor - Page 18

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          February 15, 1991, the District Court in the Jarvis Christian               
          litigation issued an order determining in part that the royalty             
          interest owners were liable to Exxon under Federal common law for           
          restitution of overcharges received by them with respect to the             
          misclassified oil.  The District Court then referred the                    
          calculation of damages to a special master for determination.  On           
          February 10, 1992, Exxon and the Allen parties entered into a               
          settlement agreement pursuant to which petitioner agreed to pay             
          Exxon $681,839.60 in settlement of the litigation.                          
               Prior to the District Court's order on February 15, 1991, it           
          was uncertain whether the royalty interest owners had any                   
          liability to Exxon.10  Prior to the settlement agreement on                 
          February 10, 1992, the amount, if any, of petitioner's liability            
          pursuant to the District Court's order was also uncertain.11                
          Prior to the settlement, petitioner did not accept or acknowledge           
          any liability to Exxon under any of Exxon's theories, and                   
          petitioner strenuously resisted Exxon's claims in maintaining               

               10Even then, the District Court's determination was subject            
          to appeal.                                                                  
               11Indeed, we note that a substantial portion of the amount             
          claimed by Exxon during its settlement conference with the                  
          decedent's attorneys in April 1991 represented interest.  Exxon             
          was seeking prejudgment interest beginning in February 1975 and             
          postjudgment interest beginning in June 1983 with respect to the            
          amounts it had paid to the Treasury in satisfaction of the                  
          judgment in Exxon I.  However, in its Feb. 15, 1991, order, the             
          District Court in the Jarvis Christian litigation had determined            
          that Exxon was only entitled to prejudgment interest beginning on           
          Feb. 27, 1986, and ending on the date of judgment in the Jarvis             
          Christian litigation, and thereafter for postjudgment interest.             




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