- 26 -
(ii) and (iii)11 as part of the “purchase price”. Mr. Polsky’s
attorneys prevailed on this point, resulting in a final version
of the Settlement Agreement that expressly allocates Components
(ii) and (iii) to “purchase price”; defines “purchase price” as
the sum of Components (i), (ii), and (iii), not merely as
Component (i) (i.e., the $15,030,000 amount), as Indeck had
initially sought; and does not anywhere describe Component (ii)
as “interest”, as Indeck had initially sought. Indeck’s
attorneys’ failed efforts to denominate Component (ii) as
“interest” or Component (i) as the “purchase price”, and Mr.
Polsky’s attorneys’ success in the face of these efforts in
having Components (ii) and (iii) labeled as “purchase price”,
together convince us that Indeck and Mr. Polsky were fully
cognizant of the allocation, negotiated it, and ultimately agreed
that the allocation of the settlement payment would be made
entirely to purchase price.
Moreover, Indeck never issued a Form 1099-INT to Mr. Polsky
with respect to the $4,856,922 it claims was intended as
interest. The explanation offered by Indeck’s chief financial
officer to the effect that the failure was a result of oversight
is unconvincing, given the magnitude of the payment and its
circumstances. A plausible inference from the failure is that
11 As used in the Settlement Agreement, Component (iii)
consisted of an amount equal to interest at the Federal funds
rate on $15,030,000 between Apr. 14 and May 9, 1994.
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