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Petitioners Deficiency
Peter and Katherine Hobler $188,518
Damian and Leigh Gerard 100,704
In the course of a family shareholder dispute, Bill Maritz,
who was chairman and chief executive officer of Maritz Inc.,
retaliated against his in-laws Katherine Hobler (Katherine) and
Damian Gerard (Damian) by terminating their professional
relationships with the corporation. Katherine and Damian
asserted claims with respect to these actions. To settle these
claims Maritz Inc. paid $500,000 to Katherine and $250,000 to
Damian. After concessions, the issue for decision is what
amounts, if any, of these settlement payments are excludable from
petitioners’ gross incomes pursuant to section 104(a)(2) as
compensation for personal injuries.1
FINDINGS OF FACT
The parties have stipulated some facts, which we incorporate
herein, along with associated exhibits. When they petitioned
this Court, petitioners Peter and Katherine Hobler resided in
Jackson, Wyoming; petitioners Damian and Leigh Gerard resided in
St. Louis, Missouri.
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code for the year at issue; all Rule
references are to the Tax Court Rules of Practice and Procedure.
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Last modified: May 25, 2011