Freres Lumber Co., Inc. - Page 12

                                                 - 12 -                                                    

            T. Freres, Jr., and Theodore F. Freres allocated the purchase                                  
            price for petitioner.                                                                          
                  Petitioner carefully calculated the value of Forest Service                              
            timber contracts it bought from the Walker family before it                                    
            agreed to the sale.  The fair market value of Forest Service                                   
            timber contracts that petitioner bought from the Walker entities                               
            was $1.5 million on March 1, 1988.  Petitioner did not buy other                               
            Walker timber contracts that it believed had an excessive                                      
            contract price.  Petitioner used the fair market value of the                                  
            timber contracts in its allocation.                                                            
                  Before March 1, 1988, petitioner's owners and officers often                             
            attended used equipment auctions and regularly reviewed sales                                  
            brochures for used equipment.  They knew the fair market values                                
            of used equipment and rolling stock that were similar to the                                   
            equipment and rolling stock petitioner bought from the Walker                                  
                  Petitioner examined the real property and estimated the                                  
            value of the land and buildings.  A solid waste disposal site was                              
            on the premises, and part of the property was contaminated with a                              
            toxic chemical.                                                                                
                  Robert T. Freres, Jr., told Larry Smith (Smith), Freres'                                 
            certified public accountant, the final purchase price allocation.                              
            Smith then told the Freres' attorney, Richard Miller (Miller).                                 
            Miller inserted that allocation in the Walker sale agreement.                                  

Page:  Previous  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next

Last modified: May 25, 2011