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On December 13, 1993, Burien Nissan gave the Johnston family
partnership a promissory note for $479,949.
On January 12, 1994, Mr. Johnston and Burien Nissan entered
into a Stock Redemption Agreement (1994 stock redemption
agreement). Under the terms of the 1994 stock redemption
agreement, Burien Nissan agreed to redeem Mr. Johnston’s 61,200
shares for the sum of $434,677.
On January 12, 1994, Burien Nissan paid $434,677 to “Don
Johnston Johnston Family Partnership.” Mr. Johnston surrendered
his remaining 61,200 shares to Burien Nissan on January 12, 1994.
The Johnstons never reported receiving $434,677, as provided in
the 1994 stock redemption agreement.
The 1994 stock redemption agreement also provided that Mr.
Johnston agreed to:
sign over and cancel the outstanding promissory note
payable by Burien Nissan, Inc. in the sum of * * *
($479,947) * * *[12]
The promissory note was marked “cancelled” on January 12,
1994.
The 1994 stock redemption agreement also provided that the
11(...continued)
payments of $5,117 (60 x $5,117 = $307,020) plus a lump sum
payment of $45,503 ($307,020 + $45,503 = $352,523). However, the
agreement only required a total payment of $352,503.
12We note that par. 2 of the 1994 stock redemption agreement
refers to a promissory note in the amount of $479,947, while the
promissory note is in the stated amount of $479,949, a $2
difference.
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