-7- petitioner denied his claim to his 50-percent share of the bad debt deduction. Legal Expenses The differences between and among petitioner, Pomeroy, and other investors led to a number of lawsuits (lawsuits). Petitioner personally paid much of the legal fees connected to the lawsuits, and he now claims that he may deduct these fees as the ordinary and necessary expenses of his business, purportedly, the development of industrial real estate. The lawsuits involved defending petitioner’s business practices, compelling petitioner’s business associates to account for profits, and related issues. The lawsuits were handled mainly by the law firms of Plunkett & Cooney; Williams, Schaefer, Ruby & Williams; and Jacob & Weingarten. For 1995, petitioner incurred legal expenses in the following proceedings which are at issue in this case: (1) Oakland County Case No. 91-413151-CK (Oakland 1), (2) Oakland County Case No. 89-367018-CB (Oakland 2), and (3) Oakland County Case No. 93-455713 CK (Oakland 3). Oakland 1 was a lawsuit by Arbor against Pomeroy and others, to which petitioner was later added as a cross-plaintiff. The proceeding essentially involved claims of diversion of management fees and breach of fiduciary duty. Oakland 2 was a lawsuit by PCA and Crittenton against petitioner, Pomeroy, Arbor, and PNC. The proceeding generallyPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011