- 5 - JC Investors would retain existing management personnel of acquired companies and would require key employees of the companies to enter into covenants not to compete. In 1989, after significant negotiations, JC Investors agreed to purchase from Cruze for $16.75 million all of the outstanding stock in petitioner. The stock purchase was structured as a leveraged buyout (LBO). In order to carry out the LBO, JC Investors organized Custom Chrome Holdings, Inc. (CC Holdings), as a wholly owned subsidiary. On May 24, 1989, a stock purchase agreement between Cruze and CC Holdings was entered into under which Cruze was to be paid $16.75 million in consideration for his stock in petitioner. On August 15, 1989, JC Investors organized Custom Chrome Acquisition Corp. (CC Acquisition), as a wholly owned subsidiary of CC Holdings. CC Acquisition was incorporated 10 days prior to the LBO for the sole purpose of facilitating the LBO. During its 10-day existence, CC Acquisition did not conduct any activities unrelated to the LBO. In August of 1989, CC Acquisition obtained from First National Bank of Boston (FNBB) a $26 million loan in order to finance the LBO and to provide working capital for petitioner after the LBO. The $26 million obtained from FNBB byPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011