- 10 -
in no event shall distributions of such compensation,
fees, repayments or distributions exceed $500,000 in
the aggregate per fiscal year of Neiman-Reed; with any
excess in earnings thereof accruing. * * *
At the time that Stanislaus purchased petitioner in December
1986, petitioner acquired MFC, and the management agreement
between petitioner and MFC was terminated.
In November 1988, after Mr. Ruf and petitioner's former
shareholders agreed on a final purchase price for petitioner's
stock, replacement notes (replacement notes) that called for
monthly principal payments of $200,000 and no interest payments
were issued to those former shareholders in lieu of the original
notes.8 During August 1988, the restrictions contained in the
original notes on the amount of cash (whether as compensation or
otherwise) that Mr. Ruf could withdraw from petitioner were
terminated by agreement of petitioner's former shareholders.
Effective February 29, 1988, MFC and Stanislaus merged into
petitioner, with petitioner as the surviving corporation of those
mergers. Mr. Ruf was the sole shareholder of Stanislaus prior to
its merger into petitioner, and, according to the merger agree-
ment between Stanislaus and petitioner, he was to be the sole
shareholder of petitioner subsequent to that merger.
8 The details of those replacement notes are not clear from the
record.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011