Free Status Report - District Court of Federal Claims - federal

Case 1:06-cv-00123-FMA

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS Evergreen Trading, LLC, by and through GLENN NUSSDORF AND CLAUDINE STRUM on behalf of GN INVESTMENTS, LLC, A Partner Other Than the Tax Matters Partner, Plaintiffs, v. THE UNITED STATES, Defendant. § § § § § § § § § § § § §

NO. 06-123T Judge Francis M. Allegra

STATUS REPORT

Pursuant to the Court's order of April 2, 2007, the parties file this joint status report setting forth their views on future proceedings in this case. 1. 2. At this time, factual discovery is completed, with a few minor exceptions. Two major substantive issues remain in this case: a. What is the proper tax treatment of the Nussdorfs' withdrawal from Evergreen Trading in April 2000; b. Whether Evergreen Trading recognized losses upon execution and termination of certain foreign exchange transactions in December 1999. 3. If either or both substantive issues are decided in favor of the Government, then the Court must decide the additional issue of whether penalties apply at the partnership level. 4. The parties agree about a schedule for expert discovery but disagree regarding the course of future proceedings. The following paragraphs set forth the parties recommendations:

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Expert Discovery 5. The parties anticipate that they will each retain multiple experts. To allow for orderly expert discovery, the parties jointly propose that the Court issue an order establishing the following schedule: a. No later than June 29, 2007, the parties will exchange designations of expert witnesses, including resumes and a brief description of the topic(s) upon which the expert(s) will testify. b. No later than July 22, 2007, the parties will exchange designations of rebuttal expert witnesses, including resumes and a brief description of the topic(s) upon which the expert(s) will testify. c. d. No later than August 2, 2007, the parties will exchange expert reports. No later than September 17, 2007, the parties will exchange rebuttal expert reports (not to exceed 20 double-spaced pages, including attachments). e. No later than November 16, 2007, the parties will complete expert witness discovery. Resolution of the Merits 6. Plaintiffs' views of the case are as follows: a. Disposition Jade Trading, LLC v. United States, Fed. Cl. No. 03-2164T on appeal could decide the first and most important issue in this case, completely disposing of the basis issue and could render a trial in this case unnecessary. b. A decision favorable to Plaintiffs in Jade Trading will leave the straddle issue, as well as the validity of Treas. Reg. § 1.752-6, for decision in this case. Both issues

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may be resolved by summary judgment. No later than December 31, 2007, the parties will file motions for summary judgment. 7. Defendant's views of the case are as follows: a. The United States believes that a trial will be required to dispose of the issues in this case and that such a trial will require approximately two weeks. b. Based upon the parties' estimate of the time required to complete expert discovery and the pretrial briefing process, as well as the other trial commitments of counsel for Plaintiffs, the United States believes that such a trial could be held in early 2008. 8. The parties request the Court to arrange a scheduling conference within the coming weeks to discuss a trial date, as well as a date for Motions for Summary Judgment, the pretrial conference, and other related pretrial events.

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Counsel for the Plaintiffs participated in preparing this document, proposed much of the language herein, and authorized Defendant to file on behalf of both parties. Respectfully submitted,

s/ Stuart J. Bassin STUART J. BASSIN Attorney of Record for Defendant U.S. Department of Justice Tax Division Post Office Box 26 Ben Franklin Post Office Washington, D.C. 20044 TELEPHONE: (202) 307-6418 EILEEN J. O=CONNOR Assistant Attorney General DAVID GUSTAFSON Chief, Court of Federal Claims Section ADAM F. HULBIG Trial Attorney JOSEPH SYVERSON Trial Attorney s/ David Gustafson Of Counsel

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