Wallace R. Noel and Robinette Noel - Page 15

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          represents consideration for petitioner's signing the release, we           
          will look to the intent of the payor (PepsiCo) to determine what            
          portion was paid for petitioner's release of his claims.                    
               At trial, Mr. Dickie, PepsiCo's representative in the                  
          transaction, testified that the amount paid to petitioner was               
          based solely on PepsiCo's valuation of the PMI corporation.7                
          Mr. Dickie testified that the amounts paid to petitioner related            
          only to the value of the PMI stock, and no amounts were paid for            
          the release of claims obtained by PepsiCo.  Mr. Dickie indicated            
          that it was a normal business practice to obtain a general                  
          release from all sellers in these types of situations.                      
               We cannot accept this testimony at face value.  The evidence           
          before the Court belies Mr. Dickie's assertion that no amounts              
          were paid for the settlement of claims.  First, the release is              
          not merely a general release of claims.  Rather, the release                
          specifically identifies petitioner's claims asserted against                
          PepsiCo and Pizza Hut in the action pending in Sedgwick County              
          District Court.  Second, it is evident from the documents                   
          presented at trial that PepsiCo would not have purchased peti-              
          tioner's stock in PMI without also receiving his release of                 
          claims.  It is apparent that PepsiCo paid petitioner $3,250,071,            

          7In his testimony Mr. Dickie explained that a retail food                   
          franchise is usually valued based on either a percentage of sales           
          income or a multiplier of income before depreciation and taxes.             
          According to Mr. Dickie, these methods were applied to PMI in               
          order for PepsiCo to arrive at the $8.25 per share price paid by            
          PepsiCo to petitioner.                                                      




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