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for failure to state a claim, but only in part. After
the case was transferred to a Federal District Court in
New York, all of the defendants, except G, settled.
The court later granted G’s motion for summary judgment
and the Court of Appeals for the Second Circuit upheld
the judgments by both District Courts. P claimed a
$217,649,340 theft loss deduction on its 1994 Federal
income tax return.
Held: P is collaterally estopped from claiming
that it sustained a theft loss by virtue of the
additional cash payment of $217,649,340. The
disposition of the prior action in G’s favor rested on
findings that P redeemed its stock for no more than it
was worth and thus sustained no cognizable injury from
the disclosure of the confidential information.
F. Brook Voght and David B. Blair, for petitioner.
Lawrence C. Letkewicz, for respondent.
MEMORANDUM OPINION
LARO, Judge: Petitioner petitioned the Court to redetermine
respondent’s determination of a $2,030,589 deficiency in its 1994
Federal income tax. Petitioner’s sole assignment of error
concerns respondent’s disallowance of a $217,649,340 theft loss
deduction claimed for that year. Petitioner alleged in its
petition that the theft loss related to the fraudulent and
illegal activities of Ivan F. Boesky (Boesky), which caused
petitioner to redeem its stock (old FMC stock) at an artificially
increased price.
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