- 5 - provision” in the certificate, it intended to purchase the shares because of the cessation of his employment with Drexel. The per- share purchase price was set at the adjusted book value on May 26, 1989, which was $45.06. Pursuant to the terms of the certificate, petitioner was entitled to contest Drexel’s determination of the book value of the shares. In August 1989 (effective May 26, 1989), Drexel redeemed the shares in exchange for a cash payment of $67,950 and a subordinated note (note) dated May 26, 1989, in the principal amount of $166,361. The note was nonnegotiable and could not be encumbered or disposed of without the consent of Drexel. The note provided for two principal payments: The first, in the amount of $142,930, was payable on November 26, 1990, and the second, in the amount of $23,431, was payable on May 24, 1994. Interest accrued on the unpaid principal balance and was payable semiannually on June and December 15. On August 23 and December 19, 1989, Drexel paid petitioner interest on the principal amount of the note pursuant to its terms. Events Preceding the Bankruptcy of Drexel In November 1986, the Securities Exchange Commission (SEC) and the U.S. Department of Justice (Justice Department) commenced investigations (investigations) of alleged violations of the Securities Exchange Act by Ivan Boesky and Drexel insiders and/or employees.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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