- 31 -
The parties appear to be in agreement that the purchase
price was at least $6,338,120 consisting of $4.5 million payable
by way of cash and a promissory note plus $1,838,120 of assumed
liabilities. They differ on whether the latter amount includes
some $300,000 claimed to represent petitioner's liability to its
pension funds as of May 8, 1983, in respect of the excess of
vested benefits over net assets in the funds. Petitioner asserts
that such amount should not be so included but rather should be
added to the foregoing amount of assumed liabilities.
Petitioner's position finds support in the separate treatment
accorded this item in the above-quoted excerpt from the sale
agreement. Further support for petitioner's position can be
found in Mr. Sheldrick's report4 which clearly indicates that
this liability is an off-the-balance-sheet item, and in footnote
G to petitioner's September 30, 1982, audit report. On the other
hand, petitioner's Form 990 for the fiscal year ended September
30, 1983, shows liabilities of $1,838,120 as part of the basis
used in computing the claimed loss from the sale to AMH. It is
difficult to reconcile this figure with the figure of $1,711,549
which is the updated total amount of liabilities shown on
4 We note that, since Mr. Sheldrick was deceased at the
time of trial, his report was not admitted as an expert report
but is part of the record because it was utilized by Messrs.
O'Donnell and Rosenkranz as a basis for their negotiations.
Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 NextLast modified: May 25, 2011