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Other facts indicate that TM did not own the intangibles.
In the purported sale of the intangibles from TM to Gatetown,
Gatetown acquired the intangible rights of TM for $7,312 on
March 1, 1986 (the document is dated approximately 1 year earlier
than it was drafted). For the fiscal year ended July 31, 1986,
MTNV’s gross receipts were $7,048,767, and its taxable income was
$636,795. Petitioners acknowledge the nominal consideration and
explain on brief that, “since 80 percent of the Eurotor
shareholders also held Torneo stock, the only Torneo shareholders
who were being bought out were Mr. Rousselet and Mr. Celedonio”
(Celedonio).
Petitioners allege that Rousselet was compensated because he
was given two other companies to operate and that Celedonio was
compensated by a 10-percent profits interest and manager position
in TM. Other than Santandreu’s testimony, there is no evidence
in the record to corroborate the allegations of compensation for
Rousselet and Celedonio. Additionally, Celedonio was not an
original shareholder of TM, and we do not know when or if he
became a shareholder. When asked why TM sold the formula to
Gatetown for $7,312, J. Montaner testified: “Well, my nephew
told me this was right, because in practice the people who are
selling it were actually also the people who were buying it.”
Petitioners state on brief: “it is undisputed that the Torneo-
Gatetown-Manver transactions were between largely related parties
and that the non-continuing Torneo shareholders were separately
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