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the fact that the agreement was between a father and son,
strongly suggests that there was no arm’s-length bargain for the
option price, but rather that the option was a testamentary
device designed to pass decedent’s interest for less than
adequate consideration.
Moreover, the foregoing picture of the partners’ relative
contributions is based almost entirely on Fred Jr.’s self-serving
testimony at trial.7 In contrast to Fred Jr.’s efforts to
portray the options in the instant proceeding as the product of
an arm’s-length bargain, in their sworn testimony in the
equitable distribution proceedings, Fred Jr. and decedent both
characterized the options as “gifts”, suggesting that both
thought it was decedent who was giving something of value to Fred
Jr., not the other way around. We note also that decedent’s
second wife provided detailed, credible testimony concerning
decedent’s frequent trips (on which she accompanied him) to
inspect each partnership property and attend to problems thereby
discovered; that decedent had an entire career’s worth of
7 Petitioner also called as a witness a HUD official who
corroborated Fred Jr.’s assertion that he was primarily
responsible for the partnership’s dealings with HUD. However, we
note that, in contrast to Fred Jr.’s emphasis in his testimony at
trial in this case that the idea of developing HUD-assisted
housing projects was entirely his own, when asked under oath 6
years earlier in connection with the equitable distribution
proceedings whose idea it had been, Fred Jr. testified that he
could not recall. The subsequent improvement in Fred Jr.’s
recollection on this point in the instant proceeding--in a manner
which serves his financial interests--casts doubt on the
credibility of his other testimony in this proceeding.
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