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3. Negotiations for 50-Percent Settlement Offer
In January 1987, Messrs. Sims and Chicoine continued their
efforts to negotiate a settlement of the Kersting project cases.
Initially, their discussions concerned a higher percentage
settlement if Mr. Kersting would agree to quit the tax shelter
business. They eventually abandoned their discussions to link
the settlement offer with Mr. Kersting's future conduct.
By letter dated January 16, 1987, Mr. Chicoine notified
Mr. Kersting that he believed he had arrived at an agreement with
Mr. Sims to settle all the Kersting cases docketed in the Tax
Court by allowing 50 percent of the claimed interest deductions.
Mr. Chicoine's letter further states that Chicoine and Hallett
would agree to represent Kersting program participants desiring
to settle their cases on these terms for a flat fee of $550 per
case.
On January 19, 1987, Mr. Kersting wrote a letter to program
participants stating that a 50-percent settlement had been
negotiated. Mr. Kersting recommended that the 50-percent
settlement be accepted; he included with his letter a form for
program participants to use to authorize Chicoine and Hallett to
represent them for purposes of settlement. As a result of
Mr. Kersting's letter, approximately 300 Kersting program
participants contacted Chicoine and Hallett seeking
representation.
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