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agreement at variance with its clear terms except by adducing
“strong proof” that the terms of the written instrument do not
reflect the actual intentions of the contracting parties.
Kreider v. Commissioner, 762 F.2d 580, 586 (7th Cir. 1985), affg.
T.C. Memo. 1984-68; Major v. Commissioner, 76 T.C. 239, 247
(1981). If the written instrument is ambiguous, Indeck need
offer only proof that satisfies a “‘preponderance of the
evidence’” standard to show the parties’ true intentions.
Kreider v. Commissioner, supra at 586 (quoting Major v.
Commissioner, supra at 247).
While the Settlement Agreement’s allocation of the entire
payment to “purchase price” is on its face explicit and
unambiguous, an argument exists that an ambiguity regarding any
provision for interest is created by the Settlement Agreement’s
definition of Component (ii) as an amount equal to a percentage
per annum of a stated sum over a designated period and its
definition of Component (iii) as an amount equal to “interest” at
the section 1274(d) rate on the same sum over a designated
period. It is unnecessary for us to decide whether the
Settlement Agreement is ambiguous, however, because even under
the lesser “preponderance of the evidence” standard of proof,
Indeck has not persuaded us that the parties to the Settlement
Agreement intended any portion of the settlement payment as
interest. To the contrary, the extrinsic evidence demonstrates
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