- 4 -
other investors; however, he was unsuccessful. Petitioner’s
initial investment in BERM was approximately $50,000.
Shortly after the restaurant’s opening in August 1994,
petitioner and Mr. Maker had disagreements over Mr. Maker’s
management practices. At that time, petitioner was winding down
his law practice in Marion, Illinois, about 45 miles away, and
was not involved with BERM full time. Mr. Maker made numerous
requests to petitioner for additional money, and, after further
inquiry, petitioner found that Mr. Maker “was spending money like
there was no tomorrow.” Petitioner also noticed a high rate of
employee turnover. Because of disagreements in management,
petitioner asked Mr. Maker to take a few weeks off while
petitioner decided whether or not to continue with the venture.
In December 1994, petitioner and Mr. Maker agreed that Mr.
Maker would no longer have any involvement with BERM. To this
end, on December 12, 1994, Mr. Maker sold his stock in BERM to
petitioner for $5,000, leaving petitioner as the sole shareholder
of BERM. Although an agreement memorializing this sale was fully
executed by the parties, there are no corporate minutes or
resolutions by BERM with respect to distributions to any
shareholders. In fact, BERM did not maintain a corporate minute
book. After petitioner’s initial $50,000 investment in BERM, he
continued to use his own money or money lent to him by friends to
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011