- 19 -
GMK's share of the total BKK management cost fee allocation
increased by a factor of seven. During that period, facts
stipulated by the parties show that GMK's gross receipts
increased substantially as well. During that period, there were
no unusual events or other requirements of GMK that justified a
substantial increase in management services required in 1991 and
1992 as compared to 1990.
Additionally, Perrysburg, which allegedly required minimal
management services, was charged $29,000 in 1990, $60,415 in
1991, and $42,700 in 1992. Petitioners did not provide any
explanation, in terms of services required by Perrysburg from
year to year, that would account for those differences.
Finally, it defies explanation how Wapak was not allocated
any of BKK's management costs in 1990. Petitioners allege that
BKK's management costs were allocated using an allocation
methodology predicated on the number of hours that the owners
spent at or on behalf of each of the commonly controlled
corporations. Wapak was incorporated and operating a Taco Bell
restaurant in 1990. We suspect that Wapak's insufficient cash-
flow was the determinant factor in BKK's management's decision
not to allocate Wapak a management cost fee in 1990.
Petitioners claim that contemporaneous records of time
allocations “were actually created, maintained and used in making
the Petitioners’ allocations.” Those records, petitioners claim,
were inadvertently destroyed. The only evidence of
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011