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provement stores. (We shall refer to retail home and garden
improvement stores of the type operated by petitioner as home
centers.) As of July 1981, Mr. Neiman, Mr. Reed, and Snider
Lumber Products Co. (Snider Lumber) were equal stockholders of
petitioner.
During July 1981, UBM Group PLC (UBM), a British company,
purchased a 51-percent majority stock interest in petitioner and
an option to purchase the remaining 49 percent of its stock that
was owned one-third each by Mr. Neiman, Mr. Reed, and Snider
Lumber. After UBM acquired 51 percent of petitioner's stock, Mr.
Neiman was hired to serve as petitioner's chairman and CEO and
Mr. Reed was hired to serve as petitioner's president and chief
operating officer (COO).
Approximately four-and-a-half months after UBM acquired its
majority stock interest in petitioner, Mr. Reed died after a
massive heart attack and UBM's top management was forced out by
its board of directors and replaced with a new management team.
From that time until approximately April 1985, petitioner em-
ployed a number of different presidents hired by UBM and ex-
perienced many financial problems. During April 1985, UBM
decided to sell its 51-percent stock interest in petitioner and
not to exercise its option to purchase the remaining 49 percent
of its stock.
During April 1985, pursuant to the terms of a redemption
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