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parties in an adversarial context at arm’s length and in good
faith. Bagley v. Commissioner, 105 T.C. 396, 406 (1995), affd.
121 F.3d 393 (8th Cir. 1997); Robinson v. Commissioner, 87
T.C. at 127; Threlkeld v. Commissioner, supra at 1306-1307; Fono
v. Commissioner, 79 T.C. 680, 694 (1982), affd. without published
opinion 749 F.2d 37 (9th Cir. 1984).
We found the testimony of numerous witnesses who testified
that the settlement negotiations between UTA and petitioner were
adversarial, at arm’s length, and in good faith to be credible.
The settlement negotiations involved two hard-nosed parties who
fought over almost every point in the agreement. At no time
during the settlement negotiations was petitioner or his counsel
able to dictate settlement terms to UTA or UTA’s counsel, or vice
versa.
UTA’s principals and UTA’s counsel were formidable and
experienced negotiators and were qualified to handle the
negotiation of all aspects of the defamation agreement and the
employment termination agreement. Mr. Berkus was a
sophisticated, experienced negotiator. UTA believed that the
release of petitioner’s defamation claim against UTA was a
necessary and material part of the settlement. UTA would not
have agreed to settle with petitioner if petitioner had not given
a release of legal claims, including the defamation claim, to UTA
as part of the settlement.
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