Opinion ID: 729764
Heading Depth: 3
Heading Rank: 1

Heading: The NBC Fee

Text: 75 MHC sought approximately $2.3 million in compensation for net cash received by EPI after September 30, 1986, but then transferred to Baxter before the 1993 EPI stock transfer. EPI collected a $2.7 million licensing fee paid by NBC for the rights to the film The Ted Kennedy, Jr. Story (the NBC Fee). MHC concludes that this cash belongs to it as the rightful owner of EPI after September 30, 1986. 76 EPI negotiated the NBC Fee in 1985 pursuant to a packaging agreement for the movie. The evidence indicated, however, that the fee really belonged to another Baxter subsidiary, Travenol Laboratories Limited (TLL), pursuant to an agreement between EPI and TLL. In early 1986, TLL and EPI entered into a contract that transferred EPI's right to the NBC Fee to TLL. TLL agreed to bear the production costs with respect to the movie. The primary purpose of the agreement was to take advantage of the tax benefits related to TLL's location in the United Kingdom. The district court adopted the magistrate judge's finding that MHC is not entitled to its $2.3 million net cash claim and that Baxter actually suffered a net cash detriment of $244,726 from its ownership of EPI after September 30, 1986. 77 MHC's argument that the evidence should be interpreted another way does not require discussion. Should does not mean must and does not evidence an abuse of discretion. One point raised by MHC does merit discussion, however: MHC claims that Baxter made several admissions that contradict the district court's findings. First, Baxter stipulated during the EPI accounting proceedings that the NBC Fee was reported as EPI income in the United States and was not reported as TLL income in the United Kingdom. Second, in 1988, when Baxter was resisting MHC's efforts to force it to transfer EPI, Baxter presented to the district court a balance sheet and affidavit that included the NBC Fee as an EPI asset. Third, in all of its U.S. tax returns from 1982 to 1993, Baxter used the same EPI financial statements upon which MHC's expert based his conclusion that the NBC fee was an EPI asset as of September 30, 1986. 78 We agree with the district court that EPI's financial statements are simply evidence, not admissions, that EPI actually owned the NBC Fee. Judicial admissions are formal concessions in the pleadings, or stipulations by a party or its counsel . . . Keller v. United States, 58 F.3d 1194, 1198 n.8 (7th Cir. 1995); see also In re Lefkas Gen. Partners, 153 B.R. 804 (N.D. Ill. 1993) (Binding judicial admissions are any 'deliberate, clear and unequivocal' statement, either written or oral, made in the course of judicial proceedings.). Because Baxter did not make a formal concession that the NBC fee was an EPI asset, it made no binding admission to this effect. 5 The financial statements were thus merely evidence to be considered. [O]rdinary evidentiary admissions . . . may be controverted or explained by the party. Keller, 58 F.3d at 1198 n.8. Baxter explained the evidence that was adverse to its defense, and the magistrate judge and the district court were free to accept this evidence.