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because it believed that the Plan was overfunded and that by
terminating the Plan, it would permit the company to distribute
Plan assets without violating new funding limits under the Tax
Reform Act of 1986. However, the Plan assets were not completely
distributed until 1988.
During 1987 and 1988, the IRS audited the Hadd-Too Plan.
During the course of this audit, Hadd-Too and Mr. Hall were
represented by attorney Susan Foreman Jordan. Ms. Jordan
represented Mr. Hall and the company in pension matters from the
fall of 1984 until sometime after March 1989. The IRS determined
that Mr. Hall engaged in prohibited transactions with respect to
certain Plan assets and that Mr. Hall was required to make
restitution to the Plan or face liability for excise taxes. The
IRS agreed to resolve the audit issues by having the Plan
distribute all its assets to Mr. Hall, who was the sole
participant in the Plan in 1988, rather than requiring Mr. Hall
to pay actual restitution or excise taxes. The entire balance to
Mr. Hall's credit in the Plan was distributed to him in 1988.
The distribution consisted of cash and property in the amount of
$1,027,229.45. At the time of this distribution, the Plan was
still a qualified plan within the meaning of section 401(a).
The Plan provided for the payment of retirement benefits to
Hadd-Too employees. In addition to the payment of ordinary
retirement benefits, the Plan contained the following provision
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Last modified: May 25, 2011