- 3 -
Gerard A. Cerand, who held 95 percent of the stock until 1989
when he became petitioner’s sole shareholder.
Because petitioner’s consulting business involved extensive
travel to airports with varying accessibility throughout the
United States, Mr. Cerand needed certain air taxi/charter
services. In 1984, responding to this need, he formed three new
corporations, First World Corp. (FWC), Cerand Aviation (CAI), and
Airport Service Corp. (ASC), based in Culpeper County, Virginia.
These separate corporations had a business purpose: to allow
petitioner greater growth while limiting any potential
catastrophic liability to petitioner in the event of an aviation
accident. Mr. Cerand was the president and owner of the three
new corporations, although no stock was ever issued.
The three new companies and petitioner were intertwined.
FWC provided administrative services to CAI and ASC, such as
labor, employee health benefits, and insurance. CAI provided the
air taxi/charter service to petitioner and other outside
clientele, as well as providing aviation instruction to outside
clientele. ASC provided the aviation support services.
Petitioner provided working capital to these companies
through an “open account receivable”, or line of credit, on which
the three corporations consistently drew advances. Petitioner
paid a total of $1,413,374.17 to FWC, CAI, and ASC from 1984
until 1991. No formal loan agreements or notes were drawn up,
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011