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Robertson sold petitioner the rights to the Acura dealership
for the nominal sum of $1. Petitioner submitted a business plan
to American Honda. Subsequently, American Honda issued the Acura
dealership to petitioner. The auto dealership, however, was
ultimately located in Calabasas, California.
As a prerequisite to obtaining the Acura dealership,
American Honda required petitioner to invest $806,000 in capital
assets. At that time, petitioner had no major financial
obligations, and he possessed financial resources of
approximately $250,000. Petitioner expected to borrow the
balance of the money needed to meet the $806,000 capital
threshold.
Intially, petitioner contributed $209,163 in cash to the
auto dealership. Of this amount, $196,921.05 was expended for
deposits, legal fees, signs and logos, office supplies, office
furniture, ceremony expenses, secretarial salaries, public
relations, promotional expenses, and transfers to business
accounts. Petitioner also selected the location of the auto
dealership as well as the design, acquired approval from county
and State authorities, hired and trained staff, and engaged in
other preliminary matters.
In petitioner's auto dealership's financial statement, his
cash contribution was reflected as "Other" in the category "Total
Current Assets". Petitioner also contributed two automobiles,
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Last modified: May 25, 2011