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also contained the recommendation that petitioner be given leave
to amend the complaint and to distinguish between the
individual’s claim and those derivative through the corporate
entity.
Thereafter an amended complaint was filed on behalf of
petitioner outlining the personal items of fraud and coercion and
the personal services nature of the contract. The amended
complaint contained allegations that petitioner was personally
involved in the transactions with the defendants, had a financial
stake and obligations in connection with the auto dealership, and
was harmed because of the flow-through nature of HGTG, an S
corporation. The amended complaint did not contain allegations
that petitioner suffered any mental stress or depression, and no
demands were made for damages attributable to petitioner’s mental
stress or depression.
Late in 1993, the decision was made by petitioner and his
attorneys to attempt settlement. A settlement agreement
containing a confidentiality clause was entered into and approved
by the bankruptcy court. The total settlement amount was $6
million, of which $557,257 was allocated to the bankruptcy
trustee for the benefit of HGTG. In addition to the $557,257
amount for HGTG, $245,501.55 of claims against HGTG was
discharged by SET and related companies. HGTG’s final Form
1120S, U.S. Income Tax Return for an S Corporation, for the
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