Robert L. Allum - Page 7

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          violate his civil rights in connection with case No. CV-N-94-455.           
          During 1999, petitioner also entered into negotiations to settle            
          case No. CV-N-94-455 with the bank and certain other defendants.            
          Petitioner hired an attorney, Kenneth McKenna, to represent him             
          in the negotiations.  Petitioner and Mr. McKenna agreed that                
          petitioner would pay him a fee of $75,000 for his services if the           
          negotiations were successful.                                               
               In approximately November 1999, petitioner and the bank                
          signed a “GENERAL RELEASE AND SETTLEMENT AGREEMENT” (the                    
          agreement).  The agreement provided:                                        
                    3.a.  Payment to be Made.  In consideration of the                
               settlement of Allum’s claims alleging violation of his                 
               civil rights as asserted in Case No. CV-N-94-445 ECR[6]                
               and without any other obligation to do so, the Bank                    
               will pay Allum the gross sum of five hundred thousand                  
               dollars ($500,000).  * * *                                             
          The agreement also stated that “As further consideration and                
          inducement” petitioner would request dismissal of ongoing Nevada            
          State litigation and Federal litigation between petitioner and              
          the defendants7 and that “In exchange for the promises contained            
          in this Agreement” petitioner would generally release all other             

               6The parties stipulated that the agreement erroneously                 
          refers to case No. CV-N-94-445 ECR and that the correct case                
          reference is to case No. CV-N-94-455.                                       
               7The Nevada litigation consisted of seven “claims and civil            
          litigation between Allum, the bank, and others before the courts            
          of the State of Nevada”.  The Federal litigation consisted of               
          nine “claims and civil litigation between Allum, the bank, and              
          others before the courts of the United States”, in addition to              
          case No. CV-N-94-455.                                                       




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