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The terms of the Houchin settlement agreement dictate when
the right of W.C. Houchin Corp. to the income accrued.6 The
settlement agreement states that “the Settling Parties have
executed this settlement Agreement as of December 21, 1998.”
Petitioner William Houchin executed the settlement agreement on
December 21, 1998. The codefendant executed a separate
settlement agreement on December 21, 1998. Representatives of
Exxon and ARCO executed both settlement agreements on December 22
and 31, 1998, respectively. Paragraph 18 states: “This
Settlement Agreement shall become effective immediately upon
execution by all the Settling Parties.” The settlement agreement
was effective by December 31, 1998. Therefore, W.C. Houchin
Corp.’s right to the settlement agreement income became fixed in
1998.
The settlement agreement states that “ARCO and Exxon agree
to wire transfer to Houchin’s attorneys * * * a total of $8
million ($8,000,000) on January 4, 1999 in full and complete
compromise and satisfaction of * * * [Houchin’s] Counterclaim
that his Royalty has been underpaid and in full and complete
compromise and satisfaction of the [codefendant’s] Claim that its
Royalty has been underpaid”. For purposes of the all-events
6 The codefendant had a separate settlement agreement and
was not a party to the “Houchin” settlement agreement. Even so,
the codefendant executed his settlement agreement on Dec. 21,
1998.
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