10
1988, minutes of the S&B board meeting, and the Buyer waived any
rights or causes of action that the Buyer may have had under the
SPA stemming from the dividend declaration. On November 17,
1988, Thor delivered 100 percent of the S&B stock to the Buyer,
and Thor received $3.5 million cash. On November 18, 1988, Thor
issued a press release stating that Thor had consummated the sale
of S&B, and the "net sales proceeds after deduction of the
related transaction costs was $3.3 Million plus certain
accumulated tax benefits."
S&B maintained an "intercompany account" to record
transactions between Thor and S&B. The books of S&B reveal the
following intercompany account balances that represent funds
transferred to Thor from S&B:
Amount due
As of from Thor
Feb. 1, 1988 $993,880.36
July 31, 1988 724,000.00
Oct. 29, 1988 1,245,880.36
Nov. 17, 1988 1,245,880.36
In November 1988, S&B recorded on its books a dividend
payable in the amount of $1,245,880.36 and charged the same
amount against preacquisition retained earnings and profits of
S&B. On January 31, 1989, S&B and Thor each offset the
intercompany account balance due S&B from Thor and the dividend
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