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By letter dated January 7, 1987, Chicoine and Hallett
outlined the conditions underlying their agreement with
Mr. Kersting to represent the test case petitioners in the Tax
Court. Chicoine and Hallett's letter states in pertinent part:
Our representation is conditioned upon the
following however:
1. We will represent only the individuals
selected as test cases and who request us to do so. We
are not representing or acting on behalf of any other
taxpayers or litigants who have invested in various
companies in which you are affiliated and who have
stipulated to be bound by the outcome of the litigation
or desire legal advice with respect to whether they
should accept the Internal Revenue Service's settlement
proposal.
2. All parties understand and agree that under
the circumstances, the Petitioners involved in the test
cases who have expressly authorized us to represent
them will be our clients and that we do not represent
you individually, although you have agreed with those
Petitioners that you will pay the legal fees to defer
[sic] the costs of their defense. We will discuss the
fee arrangement with each of the Petitioners in the
test cases and their perception of any possible
conflict of interest which we would require that they
waive.
3. It is understood that there will be no
restrictions on the advice which we may provide to our
clients and after review of the relevant facts and
documents, we are free to propose such settlements as
we may deem appropriate. We need not proceed with
trial in any situation if which we consider our
position to be indefensible or frivolous.
In early January 1987, Messrs. Chicoine and Hallett filed
entries of appearance as counsel in each of the test cases other
than the Thompson and Cravens cases.
As discussed in greater detail infra pp. 100-106, at the
time of Mr. Seery's withdrawal from the Cravens cases,
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