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In response to questions from the Court about the fact
that petitioner's payments exceeded the fees received,
petitioner gave the following explanation:
They were paid out more in aggregate than I
received in fees, yes, and these had to do
with old matters existing prior to 1989 that
were ultimately paid or resolved in 1989.
It's not that I intended to lose money on this
proposition. It's just that old matters were
resolved.
Now, people say, Gary, you could have not
paid these matters, had the clients either pay
them or whatever, and let them sue you, and then
these would have been deductible at some time
down the road, you would have incurred legal
fees and the amounts may have been larger due to
interest and penalties and you would have been
caught up in court. But I decided to resolve
older matters probably pertaining to years '82
to '84, particularly in the-–well, these matters
were resolved-–well, problems arising from
earlier years were resolved and negotiated with
the clients in '89 and these were paid.
There is no real relationship to the $2,815
in fees received in 1989 and the amounts paid.
Obviously, in the case of Dr. Chang, which is
items 13, 14, and 15, which aggregate $400, and
item 21, which is a refund of $3,500–-well, those
three amounts are minuscule in comparison to the
1990 collections of $25,830.
So there is no correlation between the two.
The reason I mentioned the fees is to show that
they were, one, current clients, that I retained
them, not obviously to show that this agreement
had been reached and to show some perspective
that, by and large, for most of the clients, the
fees taken in and the retention of the relation-
ship exceeded the amounts that were paid out in
what would have been a divisive matter.
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