- 23 -
infra.
The cable television system construction work and other
various activities NITCO engaged in, from 1983 to 1989, with
respect to NICATV were not undertaken by NITCO with a profit
motive. As of about 1989, NITCO's books reflected that Rhys and
NICATV owed NITCO in excess of $122,000. In July 1989, Rhys sold
NICATV for about $4 million. Although Rhys received sufficient
cash from his sale of NICATV to discharge this $122,000 "debt" to
NITCO, the "debt" owed to NITCO remained unpaid. On the 1989
annual report it filed with the IURC in May 1990, NITCO indicated
that it had written off as uncollectible its $122,000
"receivable" with respect to Rhys and NICATV and stated that this
was a "Non-deductible write-off" for tax purposes.
NITCO's 1988 Payment to Rhys and its 1989 Purchase of a Country
Club Membership for Rhys
Rhys left NITCO's employ and was no longer an employee of
NITCO after December 31, 1983. However, during 1984, NITCO
continued to pay Rhys a "salary", provided him with health
insurance coverage, and allowed him to participate in NITCO's
retirement plan. As a result of the FCC's taking issue with
these payments and benefits that NITCO provided to Rhys, on or
about May 31, 1985, an attorney representing NITCO advised the
FCC that Rhys would no longer serve as a "consultant" to NITCO
and indicated that NITCO's provision of such money and benefits
to Rhys would cease. As indicated above, the dispute between
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