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from Norway was the $9 million in cash and the subsequent
$325,000 adjustment amount.
Petitioners argue that the distribution of the lawsuit and
the stock sale to Norway should be integrated as a single
transaction and that the lawsuit should be treated as additional
consideration from Norway for their stock. In support of this
argument, petitioners state:
the parties’ agreement relative to the distribution of
the claim to the selling shareholders was set forth in
the Stock Purchase Agreement itself, so there could be
no closer relationship between the sale of the stock
and the distribution of the rights under the insurance
lawsuit.
This alone does not convince us that the distribution should be
integrated with the stock transaction. Indeed, petitioners have
overemphasized the role that the stock sale agreement played in
the rights and obligations “relative” to the lawsuit.
The stock sale agreement merely acknowledged that the
assignment of the lawsuit could be made without affecting the
overall sales transaction. In fact, the stock sale agreement
discusses the assignment of the lawsuit in a paragraph entitled
“Contemplated Transactions Out of the Ordinary Course of
Business” and provides in a subparagraph thereunder:
The Company may transfer to the Shareholders (or
their designee) the rights arising out of a lawsuit
(the “Lawsuit”) commenced by the Company in September
1995, * * *; provided that, (i) such rights are
assignable; (ii) all steps are taken, including without
limitation amending the complaint, so that the Company
is no longer a party to the Lawsuit; (iii) the Company
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