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Mr. Hrynik, whom Mr. Scott had not consulted since Mr. Scott had
asked him to meet with Mr. Schultz, and asked him to review sev-
eral draft documents relating to that transaction including, in-
ter alia, the following: (1) An asset purchase agreement pur-
suant to which AST would acquire MSSTA's assets; (2) a stock re-
demption agreement pursuant to which MSSTA would redeem Mr.
Carter's entire stock interest in MSSTA for $300,000; (3) an
agreement between AST and Mr. Carter pursuant to which he would
agree to consult and not to compete with AST; and (4) separate
agreements between AST and Mr. Scott and Ms. Scott, respectively,
pursuant to which each of them would purchase certain stock of
AST. (We shall refer collectively to the draft documents that
Mr. Hrynik received from Mr. Scott as the MSSTA transaction draft
documents.) At the time Mr. Scott asked Mr. Hrynik to review the
MSSTA transaction draft documents, Mr. Hrynik did not know, inter
alia, that AST was willing to pay approximately $800,000, instead
of $300,000, to acquire MSSTA's assets. Nor was he aware of the
discussions that had taken place among Mr. Scott, Mr. Harrison,
and Mr. Hall regarding the amount of MSSTA's tax liability if AST
transferred to MSSTA, and MSSTA reported, $600,000 as the sales
price for MSSTA's assets.
After he reviewed the MSSTA transaction draft documents, Mr.
Hrynik told Mr. Scott that certain of those documents were in-
complete, including, inter alia, the MSSTA transaction draft
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Last modified: May 25, 2011