- 31 - The shareholders of * * * [BMCT] and FiberComm are also related to the majority shareholder of NITCO. Because the partners are all related entities, the assets contributed to the partnership were recorded at book value for financial reporting purposes. Contributed assets and liabilities at book value are summarized as follows: BMCT FiberComm NITCO Cash $(834) $25 $3,615,771 Other current assets 402,145 -- -- Cellular communica- 2,591,958 4,075 -- tions assets Licenses & 3,099,068 43,331 -- intangibles Current liabilities (510,420) -- -- Long-term debt (6,382,521) (12,093) 210,920 Net capital (800,604) 35,338 3,826,691 contributions * * * * * * * The limited partner has contributed certain equipment for use by * * * [the BMCT limited partnership], the value of which has not been reflected in the assets or capital accounts. In addition, interest of $210,920 was accrued on the note to the limited partner prior to its conversion to a capital contribution. On June 9, 1994, shortly before the trial in the instant cases, NITCO's interest in the BMCT limited partnership was redeemed for about $3.6 million. Although petitioners offered expert witness testimony at trial as to the value of the Oregon rural statistical area number three and Washington rural statistical area number eight cellular telephone businesses, as of March 31, 1991, their experts’ appraisal reports grossly inflated the actual value of these cellular telephone businesses. One appraisal report concludedPage: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Next
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