- 29 -
Petitioners contend that they have, by implication,
established the $12 million was paid on account of Mr. Bradley’s
personal injury claims by virtue of negative inference. In
addition, they assert their right to arrange and conduct their
affairs to minimize adverse tax implications. See Commissioner
v. Newman, 159 F.2d 848, 850-851 (2d Cir. 1947) (Hand, J.,
dissenting). They point to the Implementation Agreement, the
final settlement document, which they contend supersedes all
others and implements their tax planning. They note it provides
the $12 million will be paid to Mr. Bradley “in settlement of all
direct claims * * * by Bradley against Ormet, whether relating to
the Litigations [the Six Lawsuits] or otherwise, including but
not limited to those libel and slander claims described in that
certain letter from Herbert Bennett Conner to Charles E. Bachman
dated August 11, 1995.”
Respondent counters by arguing the disputes were settled by
the binding Settlement Term Sheet, which reflects the actual
basis of the settlement, and the Implementing Agreement does not
negate the Settlement Term Sheet. Further, respondent contends
that the Six Lawsuits did in fact involve direct claims by Mr.
Bradley against both Ormet and Mr. Boyle and that these direct
29(...continued)
Commissioner, 349 F.2d 610 (10th Cir. 1965), affg. T.C. Memo.
1964-33), affd. 676 F.2d 682 (1st Cir. 1982). Thus, we do not
discuss whether the settlement payment was paid on account of
physical sickness.
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