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finding in 7 above. The jury’s $1 million finding stemmed from
its finding in 8 above. The jury made no finding of damages with
respect to its findings in 9 and 10 above.
On July 6, 1993, petitioner and Harris filed with the
superior court a stipulation in which they agreed that petitioner
would receive $665,000 of punitive damages, for a total award of
$4.5 million. Petitioner and Harris agreed in the stipulation
that Harris would pay petitioner the $4.5 million to settle all
of his claims related to the lawsuit and that CGC and the Heller
Group would remain fully liable to Harris for all payments made
by Harris. The stipulation contained numerous provisions
designed to protect Harris’ right to proceed against CGC and the
Heller Group to recover amounts that Harris paid on their
behalf.1 Harris agreed to fund the settlement by itself on
account of its banking relationship with and as an accommodation
to CGC and the Heller Group.
Harris paid petitioner $1,125,000 of the settlement proceeds
on July 7, 1993, and it paid him the balance approximately 5
months later. On his 1993 Federal income tax return, petitioner
1 Among other things, petitioner promised that he would work
with Harris in its collection and enforcement efforts against the
other defendants. Petitioner and Harris also agreed that the
superior court should retain jurisdiction of their case to enter
judgment in Harris’ favor as to the other defendants. The court
agreed to retain jurisdiction and set the matter for status on
Dec. 15, 1993. The record does not disclose what, if anything,
happened at that status hearing, or if, in fact, the status
hearing was ever held.
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