- 43 -
also received $9,508 in cash, as distributions from MSSTA of
property that it received from AST as part of the consideration
that AST paid MSSTA to purchase MSSTA's assets.
Petitioners counter that not all of the transactions that
are part of the MSSTA transaction are related. For example, they
contend that AST's payment of $300,000 to MSSTA under the asset
purchase agreement was not related to the subscription agreements
between AST and Mr. Scott and Ms. Scott, respectively. On the
record before us, we find that all of the transactions that are
part of the MSSTA transaction are related. Indeed, the respec-
tive purchases by the Scotts of AST's stock under the subscrip-
tion agreements were expressly made contingent on, inter alia,
completion of AST's purchase of MSSTA's assets under the asset
purchase agreement. In this regard, each subscription agreement
stated in pertinent part:
The purchase [of AST stock] will take place upon AST
completing its purchase of the assets of Mountain
States Stock Transfer Agents, Inc. in accordance with
an Agreement for Purchase and Sale of Assets dated
September 7, 1989 ("Asset Purchaser [sic] Agreement")
* * *. If the closing under the Asset Purchase Agree-
ment has not occurred on or before September 30, 1989,
unless extended for up to 30 days at the sole discre-
tion of AST * * *, the escrowed purchase price [for the
AST stock] will be returned promptly and without in-
terest to Purchaser, and this [subscription] Agreement
shall be deemed terminated.
Petitioners further contend that they received an aggregate
21-percent stock interest in AST directly from AST, and not as a
distribution from MSSTA, and that they did not pay only ten cents
Page: Previous 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 NextLast modified: May 25, 2011