Affiliated Foods, Inc. - Page 13

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          petitioner, and, if approved, the forms were bound into a "food-            
          show book".                                                                 
               Each member store attending the show received a food-show              
          book.  Each page related to one vendor, and had a tear-off strip            
          on the right-hand side, which indicated the amount being ordered            
          and the product promotional allowance arising therefrom.                    
          Generally, the product promotional allowance was paid in cash at            
          the food show when the order was placed.  Not all product                   
          allowances, however, were paid in cash.                                     
               The cash used by the vendors to make these payments at the             
          food show came from three sources:  (1) Promotional accounts;               
          (2) check transactions--a vendor would give petitioner a check,             
          and petitioner would cash the check and provide cash to the                 
          vendor at the food show (check transaction); and (3) cash brought           
          to the food show by the vendor.                                             
               In connection with the 1989 food show, vendors collectively            
          instructed petitioner to transfer a total of $74,700 in cash to             
          them out of the promotional accounts.  In connection with the               
          1990 food show, vendors collectively instructed petitioner to               
          transfer a total of $112,025 in cash to them out of the                     
          promotional accounts.                                                       
               When funds used by vendors at the food show came from a                
          promotional account or check transaction, the vendors would                 
          provide petitioner with written instructions indicating the                 






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Last modified: May 25, 2011