- 7 - On December 20, 1991, petitioner and his attorney met with the Hansens and their attorney. After extended discussions, petitioner entered into a stock purchase agreement (the agreement) wherein he agreed to sell his interest in BCBI to the Hansens for $1,050,000 ($300,000 in cash, payable at various dates, and a note from the Hansens and BCBI in the amount of $750,000). The purchase price was allocated as follows: $575,000 for all issued and outstanding stock of BCBI; $100,000 for petitioner's covenant not to compete; $75,000 for consulting services to be provided by petitioner as described in the agreement; and $300,000 for the assumption of a lease and assignment of petitioner's option to purchase certain land near the marina. During the meeting that took place on December 20, 1991, Mr. Hansen learned about petitioner's outstanding advances to BCBI, which at the time amounted to $475,000. Apparently, Mr. Hansen was unaware that BCBI's books reflected a liability to petitioner, and he insisted that any debt owed to petitioner be eliminated. Petitioner and the Hansens reached an understanding as to how the outstanding advances were to be treated, as reflected in the following paragraphs in the agreement: The shareholder, as the sole Shareholder and as President of the Corporation, hereby makes the following representations and warranties which shall survive the Closing Date;Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011