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partner cannot be made. The partnership tax returns for the
years 1980 through 1994 reflect that the oil and gas activity was
more profitable overall than the farming activity during that
period.
After Melvin’s death, a dispute arose concerning BBP. On
April 19, 1995, Jean, individually and in her capacity as
independent executrix of the estate, filed suit against Russell
and other parties. The original and amended petitions sought,
among other things, an accounting of the assets and liabilities
of BBP in order to establish the value of BBP’s assets and
liabilities and the respective interests of Melvin and Russell as
of the date of Melvin’s death. The dispute was also outlined in
the estate’s 1994 Form 1041. On a Form 4684, Casualties and
Thefts, attached to the 1994 Form 1041, the estate reported a
casualty/theft loss of $560,900. In an attachment to the Form
4684, the estate alleged that Russell had embezzled cash from BBP
bank accounts and transferred it to his own business and personal
accounts, resulting in a casualty/theft loss of $560,900. The
estate further alleged:
A portion of the amount of cash embezzled from the
partnership in 1994 has been ascertained from the
partnership tax return. The estate received its 50%
portion of the income distributions for oil properties
in the U.S. and Canada. The Estate has not received
its 50% of the distribution from the farm operations
because Russell Ballantyne, the general partner has
taken the money.
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