Originally from:
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Hardcover
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Electronic
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CHAPTER 95
ACTIONS TAKEN BY CORPORATIONS
AFTER LITIGATION
Section
§ 95.01 Introduction
§ 95.02 Tax Treatment of Awards
§ 95.03 Parties to the Settlement
§ 95.04 Enforcement of the Settlement
§ 95.05 Confidentiality and Nondisclosure
§ 95.06 Ratifications
§ 95.07 Attorneys' Liens
§ 95.01 Introduction
The litigation process does not end with a court judgment or
settlement of a case. The appeals process and the considerations that go
into deciding to appeal a judgment are beyond the scope of this work.
There are a number of considerations that should accompany the final
resolution of a lawsuit and particularly a settlement.
§ 95.02 Tax Treatment of Awards
Where litigation is resolved with a payment by one of the parties to
another, the tax treatment of the payment can be a significant factor. The
general rule is that amounts received will be included in taxable income.1
There are exceptions to this rule that will exclude part or all of the
payment from taxable income or defer its inclusion to a later date. The
deduction of amounts paid rests on the standard test for business
deductions--that is, the question of whether an expense is ordinary and
necessary.2 Generally, application of this rule for the business
corporation will result in a deduction.
In both cases, the test for income tax treatment is based on the claims
made in connection with the litigation. Because the business corporation
Roger J. Magnuson is a Partner at Dorsey and Whitney, LLP, where he serves as Head of the National Strategic Litigation Group and has practiced since 1973. He has been recognized as one of the top trial lawyers in the United States by major national and international publications, including Chambers International Guide to American Lawyers, which profiles the top 500 trial lawyers in the United States, Best Lawyers in America, Who's Who in American Law, and Who's Who in America. Mr. Magnuson was also recognized by a Journal of Law and Politics' survey for Judge's Choice "Wins Most Cases."
Some high profile cases that he has litigated include representation of the Florida Senate in the Bush v. Gore election controversy in 2000; and representation of the Plaintiffs in the widely publicized and studied Mall of America case. For several years he has represented, among other persons and entities, the Minnesota Twins and Major League Baseball principals and players in litigation; and has litigated national and local cases in federal and state court venues. He has appealed before the Supreme Court in a number of cases; as well as the Minnesota Supreme Court. He has authored several articles and 7 books.
Richard A. Saliterman is a Principal in Saliternan & Siefferman P.C., a full-service firm in Minneapolis established in 1976. Mr. Saliterman is a leading expert on corporate business matters, and is the author of several publications on business start-ups, franchises, and trademarks. Mr. Saliterman is the former National Judge Advocate for the U.S. Navy League, based in Washington D.C.
Contributing Editor:
Amanda Chang
Contributing Authors:
Alecia Anderson
Seth Back
John Baker
Shannon Berg
Constatin Burachek
Benjamin Carpenter
Ryan Check
Carl Christensen
Peter Fear
Michael Frasier
Aaron Hall
Catherine Hanson
Paul Harman
Amy Ithlan
Michael Kern
Chris Kuhlman
Brett Larson
Joshua Lederman
Karen Lundquist
James Magnuson
Jennifer Mead
Rao Menier
Heidi Miller
Rachael Moxon
Oliver Nelson
Scott Peitzer
Mitchell Skinner
Jonathan Stechmann
Lael Weinberger
Jonathan Wilson
Alex Zumbulyadis