Lumber City Corporation, f.k.a. Neiman-Reed Lumber and Supply Company, Inc. - Page 3

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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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