Dakotah Hills Offices Limited Partnership, An Arizona Limited Partnership, William M. and Dianne B. Stephens, Tax Matters Partner, et al. - Page 9

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          In turn, Admiral agreed not to pursue the investors' claims                 
          against specific individuals enumerated in the document, but                
          reserved the right to "pursue any of the assigned claims against            
          any other person, or any of its own claims against any person."             
          The investors, however, retained the right to pursue other                  
          specific, enumerated individuals at their own individual expense            
          and, through counsel of their own choosing.  Next, Admiral agreed           
          to "indemnify, defend and hold harmless the Investors" against              
          claims by third parties relating to the investor notes.  Finally,           
          on December 29, 1989, the Settlement Agreement was approved by              
          the bankruptcy court.7                                                      
               In April 1993, respondent mailed the FPAA's, to petitioners,           
          which proposed adjustments on the premise that "the discharge of            
          liability on the partners' capital contribution notes in 1989               
          resulted in a partnership distribution pursuant to * * * section            
          752(b)."                                                                    
               Petitioners filed a petition with this Court contesting                
          respondent's proposed adjustments.  Thereafter, we granted                  
          petitioners' motion to consolidate all of the cases, pursuant to            
          Rule 141.  Petitioners filed a motion for summary judgment, on              
          the ground that the adjustments in the FPAA's were not                      




               7The record indicates, however, that the Settlement                    
          Agreement did not encompass all of the investors involved in the            
          partnerships.                                                               




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