- 5 - On January 5, February 5, and May 30, 1990, petitioner used his personal credit cards to obtain cash advances on WIS’s behalf totaling $19,500. On August 24, petitioner deposited a personal check in the amount of $15,000 into WIS’s account at Palmetto Federal. The deposit slip identifies the amount as “Loan”. At some point in 1991, WIS filed a petition for reorganization under chapter 11 of the Bankruptcy Code. Petitioner continued to operate the corporation in bankruptcy while it endeavored to pay its debts. By the end of the year petitioner had formulated a plan of reorganization (the business reincorporation transaction). The insurance investigation business would be continued through a newly formed entity called Southeast Professional Services, Inc. (SPS), and the security services business discontinued. WIS would transfer assets to SPS to provide the new company’s initial capital and would also lease to SPS its equipment and furniture. As an inducement to help him manage the business, petitioner would share ownership of SPS with two associates named Lewis and Tate. Each would hold an equal one-third share of SPS’s newly issued stock, but only petitioner among the three holders would be responsible for an initial contribution of property, which would be supplied by WIS.3 3 Petitioner’s uncorroborated testimony is the source of most of the evidence in the record concerning the terms of the business reincorporation transaction outlined above. Under the Bankruptcy Code, in general any transfer of an interest in property of the bankruptcy estate after the filing of the (continued...)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