- 5 - organized under the laws of the States of California and Nevada. The limited partners obtained interests in the partnerships by executing subscription agreements. The partnerships purchased the cattle used in their breeding operations from Hoyt & Sons Ranches (Ranches). In payment for the cattle purchased, the partnerships executed promissory notes to Ranches. Thereafter, the partners signed assumption of liability agreements, thereby assuming personal liability for these recourse partnership liabilities. Principal payments on the notes became due starting in the sixth year after the notes were executed. Pursuant to the settlement agreement (the agreement), the numbers of cattle deemed to be held by the partnerships were reduced. Accordingly, the amount of principal on each of the notes payable to Ranches was treated as reduced. The agreement provides that this new principal amount is the amount of partnership debt to be treated as personally assumed by the partners. The agreement further provides: Each partner's profit and loss sharing percentage is determined annually by comparing the partner's capital account to the aggregate of the capital accounts of all partners in the partnership. This determination is made based on the total capital owned, not the total capital originally subscribed.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