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that EDS would have been successful in its defenses to the
lawsuit or with respect to the counterclaim. We are, thus,
satisfied that the lawsuit had merit--that RTA’s chance of
success in the lawsuit was not remote or nebulous--and we so
find.
C. Realistic Possibility of Enforcing a Judgment
Having found that the lawsuit had merit, we now inquire
whether there was a realistic possibility that RTA could actually
have enforced a judgment against EDS. The principal remedies
sought by RTA were specific performance, delivery of the TTS, and
injunctive relief. Alternatively, RTA asked for the return of
moneys paid by RTA and unspecified damages. Petitioners'
principal argument is that EDS had no financial ability to
provide either performance under the agreement or any money to
RTA. Petitioners point to EDS's dire financial condition as
objective evidence that performance or payment was not reasonably
foreseeable at the end of RTA's 1991 tax year. Petitioners
overlook two things, however. First, EDS's principal
shareholders were named in the complaint and had guaranteed the
performance of EDS's obligations under the agreement.
Petitioners have failed to prove the inability of those principal
shareholders to satisfy any judgment against them. Second, EDS
had patent and other rights with respect to the TTS technology,
along with certain TTS equipment. RTA has failed to prove those
rights and equipment were valueless. Indeed, during 1991 the
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