Estate of Robert L. Wagner, Deceased, Ruth R. Wagner, Personal Representative, and Ruth R. Wagner, et al. - Page 15

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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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