- 9 -
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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