Jerry and Patricia A. Dixon, et al - Page 297




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          with the explanation of what the options might be as to the                 
          desirability of accepting any settlement proposal."                         
               On February 6, 1988, Mr. Kersting wrote to Mr. Hallett                 
          stating in pertinent part:                                                  
               I take it from our phone conversation yesterday that                   
               you are intent now to trigger the melt-down on me and                  
               our corporations with which you have threatened me now                 
               for months.  And if I have absorbed all this correctly,                
               you will do this mainly out of concern that some of my                 
               friends might sue you at some time down the line if you                
               do not advise them of a "settlement" which you perceive                
               to be available.                                                       
               The bitter irony of all this is that there was only a                  
               remote possibility that anyone of my friends would sue                 
               you.  If you go through with your threat to cause a run                
               on us you will have THE CERTAINTY that there will be                   
               litigation.  It will be hell after this.                               
               On February 8, 1988, Mr. Kersting wrote a letter to Kersting           
          program participants warning them that Chicoine and Hallett soon            
          would circulate the details of a 20-percent settlement offer.               
          Mr. Kersting urged Kersting program participants not to hire                
          Chicoine and Hallett for purposes of settlement and instead to              
          await the Court's decision regarding the evidentiary issues                 
          raised by Chicoine and Hallett on behalf of the test cases.                 
          During this period, Mr. Kersting threatened to sue Chicoine and             
          Hallett if they reported the settlement offer.                              
               On February 9, 1988, Mr. Chicoine issued two letters, one              
          addressed to the firm's clients and one addressed to Kersting               
          program participants who had contacted Chicoine and Hallett                 
          regarding representation.  These letters served as status reports           
          on the Tax Court case and settlement negotiations.  Mr. Chicoine            


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