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new plant, it was agreed by the board that the return
in the future would be worth this investment.
It was agreed by the board that surplus company
funds should be earmarked for the above project.
In its section 534(c) statement, petitioner states that "the
Board decided to earmark all surplus for this expansion" but that
management estimated the cost of building and bringing on line
the second facility as well in excess of $1,800,000, based upon
the cost of the first facility. Petitioner provides the
following breakdown of costs for building and outfitting the
second facility:
Building $300,000
Machinery 580,000
Land 100,000
Initial inventory 600,000
Hiring and training work force 220,000
TOTAL 1,800,000
Respondent argues that the minutes of the board of directors
meeting on January 13, 1992, do not establish an intent by
petitioner to begin construction of a new manufacturing facility.
Additionally, respondent argues that petitioner does not mention
any actual expansion that has been implemented, or,
alternatively, that petitioner's proposed or pending construction
expansion plans are not set forth and that petitioner offers no
explanation for the delay in completion. Respondent contends
that the square footage of extra manufacturing space is not
stated and that petitioner neglects to name any real estate
agents, government officials, or architectural firms that it has
contacted.
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