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his interest. Petitioner also lent money to another company that
was near bankruptcy, Consumat Systems, Inc., a solid waste
incineration business. With petitioner's funding, Consumat
Systems became profitable.
From 1973 until 1986, petitioner's primary business activity
was serving as the chairman and chief executive officer of
Environmental Systems Co., Inc. (ENSCO), a hazardous waste
disposal company. In 1972, petitioner had advanced a substantial
amount of money to ENSCO to develop a hazardous waste
incinerator. Shortly after petitioner provided the financing, it
became clear that ENSCO would be unable to repay him. Petitioner
decided to become more involved in the management and operation
of the struggling company with the goal of making it profitable.
He also took shares in the company based on his previous
advances. In 1986, petitioner decided to decrease his
involvement in the day-to-day operations of ENSCO and remain
involved only in the company's long-term planning. At that time,
petitioner had been selling some of his ENSCO stock. From 1985
through 1988, petitioner sold ENSCO stock for total sales
proceeds of approximately $31 million and capital gain of
approximately $30.9 million. In September 1988, petitioner owned
over 2.3 million shares of ENSCO stock with an estimated value of
$38.4 million.
When petitioner began to withdraw from the management of
ENSCO, he decided to become more active in other business
ventures. In particular, he intended to acquire financially
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