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owned the following four entities, each of which operated a theme
park:
Date or Year
Subsidiary of Acquisition Percentage Ownership
Ozarks Entertainment, Inc. 12/86 92.5
1987 7.5
Deer Forest, Inc. 1/87 100
The Nygem Co. 1/87 100
Rapids, Inc. 2/88 100
Petitioner did not directly own stock in any of the subsidiaries.
Petitioner served as the Chairman of BEI's four-member board of
directors. During 1986 to 1988, petitioner did not receive wages
from BEI, TELCOR, or any of their subsidiaries. Nor did
petitioner receive dividends from BEI during these years.
BEI usually purchased the subsidiaries through debt
assumption. The subsidiaries needed capital to cover their
operating expenses and to stay in business. The majority, if not
all, of the subsidiaries' assets had been encumbered by third-
party lenders before BEI or TELCOR acquired the subsidiaries.
Because of their poor financial positions, the subsidiaries could
not obtain bank loans. Petitioner used his own assets to obtain
financing for the subsidiaries. He borrowed approximately $14
million from banks at about 10-percent interest and pledged his
ENSCO stock as collateral. Petitioner transferred the borrowed
funds to BEI and TELCOR, which, in turn, transferred the money to
their respective subsidiaries. BEI also lent money to other
businesses that petitioner owned that were not subsidiaries. BEI
and TELCOR each recorded the advances as "Notes Receivable-Melvyn
Bell" on a general ledger account. Petitioner decided the amount
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