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Background1
VAPARO, Inc. (Vaparo), is a closely held corporation
organized under the laws of the State of New York. Vaparo was
formed with one class of stock, one-half of which was owned by
Decedent and one-half of which was owned by her son (Son).
Vaparo was recapitalized on December 20, 1983, with three classes
of stock. Each share of the first class, class A stock, was
assigned a par value of $1. Each share of the second class,
class B common stock, was valued at $0.2 The third class,
noncumulative convertible preferred stock, was assigned Vaparo's
remaining value, giving each of the preferred shares a value of
$5,000.
Immediately after Vaparo's recapitalization, its stock was
owned as follows:
Shares of Shares of Shares of
Class A Class B Preferred
Shareholder Stock Common Stock Stock
Son 50 5,000 500
Decedent 50 5,000 500
After the recapitalization, but before September 1, 1987,
Decedent gave away all of her Vaparo stock, less 470 shares of
1 The stipulations and attached exhibits are incorporated
herein by this reference. Decedent resided (and her will was
probated) in New Jersey. The executrix resided in Brooklyn, New
York, when she petitioned the Court.
2 Under the recapitalization, all future appreciation of
Vaparo was assigned to the class B common stock.
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Last modified: May 25, 2011