- 4 -
PCAB, which is based in Alton, Illinois, is a regional bottler of
Pepsi-Cola products in the Midwest. At all relevant times prior
to May 1987, Ms. Maggos owned 56.7 percent of PCAB's stock, and
her only son, Nikita Maggos, owned the remaining stock. Nikita
Maggos was the president and a director of PCAB, and he oversaw
the daily operation and management of the company. Ms. Maggos
had little, if any, participation in the operation or management
of PCAB after the mid-1960's, having moved to Honolulu, Hawaii,
from Alton, Illinois, at that time.
Following her move to Honolulu, Ms. Maggos retained Robert
Hite, a lawyer in Hawaii, to update her estate tax plan. The
estate plan included Ms. Maggos' transfer of complete ownership
of PCAB to her son, Nikita Maggos, which it sought to accomplish
with minimal tax consequences. Effective May 1, 1987, upon
consultation with Mr. Hite and certain other advisers, Ms. Maggos
entered into the redemption transaction with PCAB under which she
received a promissory note from PCAB in exchange for her stock.
The note provided for annual payments of interest at a rate of
8 percent per year and the payment of the $3 million face amount
at the end of 10 years. The note was structured so that Ms.
Maggos would have an improved income stream to meet her extensive
nursing care needs. As of May 1, 1987, Ms. Maggos' stock in PCAB
was worth substantially more than $3 million.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011