Since there's so much confusion at the USCF, Wick, and others, I'll make one last post on this issue.
Was their legal liabilities reduced by $39,000 or not? About that crack about "HONESTLY portrayed that way" (see below) have you checked with the IRS regarding rules on taxable income? A phone call may help you guys clarify the matter of debt cancellation being income.
Confusion Alert: Susan owes money to the lawyers; her lawyers did not owe money to Susan. It was her debt (not the lawyers') that was partially cancelled by the insurance payment. This seems to be the point which is leading the USCF, Wick, and others astray.