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this list of owners on December 31, 1989, as did William G.
Stalnaker on December 31, 1990. Mr. Tominac and the corporation
terminated their ownership interests in both entities during
1990, and Messrs. Franks and Stalnaker terminated their ownership
interests in the entities during 1991. On December 31, 1991, the
outstanding stock of Financial and the limited partnership units
of Limited were held by Messrs. Cummings, Brody, Waldman, and
Boyarsky.
During the relevant years, Prime was an investment banking
and financial services firm that earned revenues mostly by
investing and placing money. Prime also earned revenues from
commissions and administrative services generated by the Prime
Plan. Prime researched, developed, and began marketing the Prime
Plan in 1988. The Prime Plan provided death benefits and
dismissal wage benefits (DWB's) to qualifying employees of
participating employers.
On November 29, 1991, Prime filed for protection under
Chapter 11 of the U.S. Bankruptcy Code.
B. Development of the Prime Plan
Mr. Brody developed the concept of the Prime Plan in 1988 in
response to 1984, 1986, and 1987 tax legislation that limited the
tax benefits a small business owner derived from a pension plan.
Mr. Brody expected that the Prime Plan would provide meaningful
tax deferral to small businesses with few employees. The Prime
Plan purported to enable business owners to make tax deductible
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