Madeline A. Coblenz and William J. Mason - Page 18

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          attorneys underwent various steps:  (1) Filing an administrative            
          claim, (2) filing a complaint in U.S. District Court, (3)                   
          participating in mediation, (4) filing various court papers, (5)            
          pursuing settlement discussions, and (6) drafting a settlement              
          agreement.  We evaluate each step to determine whether the                  
          settlement proceeds paid by the FDIC were on account of                     
          petitioner’s claim of harm to business reputation.                          
               Petitioner filed an administrative claim with the FDIC which           
          was subsequently dismissed.  The record does not contain the                
          administrative complaint filed by petitioner with the FDIC.  As             
          to the types of damages alleged by petitioner in the                        
          administrative complaint, an FDIC internal memorandum suggests              
          that petitioner sought $2.5 million plus interest for the loss of           
          his Modern World stock.                                                     
               In his original and amended complaints in the U.S. District            
          Court, petitioner never alleged that his business reputation was            
          harmed.  Instead, as to Counts I, III, and V in the amended                 
          complaint, petitioner claimed that First City Bank’s actions                
          caused him to lose his equity interest in Modern World.  The                
          remaining counts did not specify any damage resulting from harm             
          to business reputation.  Petitioners argue that as to all counts            
          in petitioner’s amended complaint, petitioner sought actual and             
          consequential damages which included harm to business reputation.           
          The language of the original and amended complaints and the                 

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