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account was fully liquidated. Petitioner did not receive
Schedules K-1, Partner's Share of Income, Credits, Deductions,
Etc., from Estes Co. from 1981 through 1989 or 1990.
Petitioner employed Mr. Estes under the management contract
from September 1980 through September 1985. He did not serve as
an officer or director of petitioner during those years.
On September 30, 1986, petitioner's board of directors voted
to terminate the management contract effective December 31, 1986.
Formal notice of termination provided to Estes Co. was dated
November 1, 1986. At the time the management contract was
terminated, all of the employees originally listed in the
contract had retired from or otherwise terminated their
employment with petitioner except for Mr. Shedd, and he was
preparing to retire from petitioner.
The Pension Plan
On September 18, 1980, petitioner adopted a defined benefit
pension plan (the plan), effective September 20, 1979.
Petitioner amended and restated the plan on December 5, 1985,
effective for plan year ending September 19, 1985, and respondent
issued a favorable determination letter as to the qualification
of the plan and its related trust as restated (hereinafter
collectively referred to as plan) on July 8, 1987. The
determination letter cautioned: "Continued qualification of the
plan will depend on its effect in operation under its present
form."
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