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owe any tax as a result of the MSSTA transaction only if the
Service accepted those return positions of MSSTA and the Scotts.
At the closing of the MSSTA transaction, Mr. Scott, in his ca-
pacities as president, director, and stockholder of MSSTA, was
bound to know, and consequently MSSTA was bound to know, that
MSSTA would owe tax substantially in excess of $10,000 on the
consideration, which was substantially in excess of $300,000,
that he and MSSTA knew AST paid to purchase MSSTA's assets.
With the closing of the MSSTA transaction, including (1) the
amended asset purchase agreement, (2) the Carter-AST consulting
agreement, (3) the stock redemption agreement, and (4) the sub-
scription agreements, MSSTA was left insolvent as of the closing
date, considering the effect of MSSTA's unpaid tax liability.
As part of the MSSTA transaction, all of MSSTA's employees
became employees of AST, including Mr. Scott who became president
of AST. Only Mr. Scott also remained an employee of MSSTA.
After the closing date, Mr. Bosworth contacted Silverado
Savings and Loan, which was the lessor on the lease obligation
for which Mr. Scott also was personally liable, to negotiate a
termination of that lease. Mr. Bosworth advised Silverado
Savings and Loan that MSSTA was vacating the space that it was
leasing either in December 1989 or January 1990, and MSSTA did,
in fact, move out around that time. Silverado Savings and Loan
took no action against MSSTA or Mr. Scott with respect to that
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