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it impossible to operate Lakeview together. Their
incompatibility resulted in an agreement executed on March 20,
1991, under which Lakeview agreed to redeem William's shares and
petitioner agreed to purchase William's interest in the Fence
Property (Redemption Agreement). On April 1, 1991, pursuant to
the Redemption Agreement, Lakeview paid $490,000 to William in
redemption of his shares, thereby terminating his interest in the
corporation, and petitioner paid $75,000 to William in exchange
for William's interest in the Fence Property.3 The Redemption
Agreement further provided for the repayment of a $39,079.75 debt
Lakeview owed to William and contained a general release
provision whereby the parties--namely, petitioner, William, and
Lakeview--agreed to mutually forgive and release each other from
any claims existing as of the April 1, 1991 closing date (except
the aforementioned debt of Lakeview to William, payment of which
was to be made at closing).
Subsequent to the execution of the Redemption Agreement,
William became convinced he had been cheated. In William's view,
petitioner and Lakeview's attorney had taken advantage of his
diminished capacity, caused by a near fatal aortic aneurysm, the
earlier death of his wife, and his emotional distress resulting
from the disagreements with his son, to pressure him into the
3 Although the Redemption Agreement provided that William
would execute a quitclaim deed with respect to his interest in
the Fence Property, William had in fact previously quitclaimed
such interest to the Lakeview Realty Company partnership.
Accordingly, on the Apr. 1, 1991 closing date of the Redemption
Agreement, William effected the transfer to petitioner by
assigning his partnership interest in Lakeview Realty Company to
petitioner, and petitioner on the same day executed a certificate
of discontinuance of the Lakeview Realty Company partnership.
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