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William T. Perks
William T. Perks is a Canadian chartered accountant and
attorney who served as Mr. Leonard's tax and legal adviser. Mr.
Perks advised Mr. Leonard on the formation and reorganization of
his pipeline industry entities and on subsequent transactions. Mr.
Perks also worked for petitioner.
In February 1987, Mr. Leonard approached Mr. Perks about the
prospect of petitioner's paying Mr. Leonard a bonus. Mr. Leonard
believed that he was entitled to a bonus because: (1) The All
American Pipeline project was completed and petitioner had
unencumbered financial resources to compensate him and (2)
petitioner’s activities were going to cease shortly. Mr. Leonard
also believed he should receive from petitioner an amount equal to
the value of the money and property ($1,680,000) awarded to his
former wife in their divorce proceedings.
In connection with Mr. Leonard’s request, Mr. Perks consulted
with Arthur Andersen & Co. (Arthur Andersen) in Milwaukee,
Wisconsin, in May and September 1987. Arthur Andersen
representatives prepared a written analysis, “R.L. Leonard-Analysis
of Reasonable Compensation-LPC Ltd.’s Y/E 9/30/87.” This analysis
discussed nine factors relevant to whether compensation is
reasonable and provided Arthur Andersen’s opinion with respect to
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