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During 1983 through March 1986, when Baybrook left the Sley
Corporations, Baybrook did not have any communication with either
Beatrice, Betsy, or Ben about the Sley Corporations. During
these years, Baybrook did not send to Beatrice, Betsy, or Ben
copies of bills, the financial statements she prepared, or any
other correspondence that came into the office. Baybrook did not
see any correspondence that was signed or received by Beatrice,
Betsy, or Ben on behalf of the Sley Corporations, except for (1)
occasional checks signed by Betsy or (2) promissory notes signed
by Sley Corporations officers. During this period, Baybrook was
in the Sley Corporations offices virtually every day, except when
she was on vacation.
Betsy did not direct either petitioner or Baybrook as to
which, if any, of the Sley Corporations should pay for the
expenses appearing on the American Express invoices. Petitioner
checked with Betsy as to whether Betsy charged particular items
or incurred particular expenses, but he did not ask Betsy whether
particular expenses should be paid by the Sley Corporations.
Neither Betsy nor Ben gave petitioner instructions to pass along
to Baybrook as to the amount of salary Beatrice, Betsy, and Ben
were to receive, nor did they give instructions as to which of
the Sley Corporations were to pay the salaries.
In addition to supervising Baybrook and running the daily
operations of the Sley Corporations, petitioner transferred money
among the Sley Corporations’ bank accounts and bought
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