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OPINION
I. Contentions of the Parties
Petitioners contend that there were two separate
transactions that occurred when the parties resolved their
disputes--a sale of stock for $60 million shared in by all
stockholder parties of the Voting Trust and the $12 million
payment from Ormet to Mr. Bradley. The later payment, it is
argued, was paid only to Mr. Bradley because it was in settlement
of only his claims for what he maintains was a conspiracy of
defamation, slander, and libel to his business reputation, as
well as intentional infliction of emotional distress.
Petitioners argue that had any part of the $12 million been
paid for stock, it would have had to be shared with the other
parties to the Voting Trust. Because it was not shared, the only
possible explanation is Mr. Bradley’s personal injuries, payment
for which would be excludable from gross income under section
104(a)(2). As a part of the settlement, a general release was
required which would include Mr. Bradley’s tort-type personal
injury claims.29
29 Petitioner underwent surgery in August 1993 for prostate
cancer. Although on brief petitioners claimed that the increased
stress resulting from petitioner’s involvement in the Six
Lawsuits adversely affected his ability to fight the cancer,
there is no evidence to suggest that events resulting from the
Six Lawsuits were the indirect, let alone, the proximate cause of
petitioner’s metastasized cancer. “[T]he consequences of a
dispute are not necessarily commensurate with its origin.” Glynn
v. Commissioner, 76 T.C. 116, 121 (1981) (citing Knuckles v.
(continued...)
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