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hospital. Thus, the proposed sale as described will
not benefit those in a controlling position with
respect to you by virtue of the ability of such persons
to unfairly manipulate the transaction. The sale will
not jeopardize your tax exempt status under section
501(c)(3) of the Code.
On or about February 1983, Mr. O'Donnell assisted in forming
Anclote Manor Hospital, Inc. (AMH), a Florida for-profit
corporation whose stock was owned by petitioner's board members
individually, to purchase petitioner's assets.
On February 8, 1983, petitioner hired Stanley W. Rosenkranz
(Mr. Rosenkranz), a partner in the law firm of Holland and
Knight, to negotiate the sale of the hospital. In these
negotiations, Mr. O'Donnell represented AMH as buyer and Mr.
Rosenkranz represented petitioner as seller. Both lawyers knew
the sale had to be for fair market value. Both relied in part on
Mr. Sheldrick's appraisal in setting the purchase price. Both
knew Mr. Sheldrick's appraisal did not include the Belcher Road
or County Road #77 properties. Negotiations between Mr.
Rosenkranz and Mr. O'Donnell continued between February 1983 and
April 1983, with the parties exchanging several drafts of a
purchase and sale agreement. Mr. Rosenkranz insisted that AMH
assume petitioner's liabilities including the liability for
contributions to the pension plans. He also required that a bank
hold the paper and foreclose on the mortgage if the payments were
not made.
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