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the treasurer and chief financial officer. During 1971, while at
Alan Morris, Mr. Spencer became involved in the acquisition and
sale of pest control companies.
Mr. Spencer remained with Alan Morris until 1979 when he
organized SSI. Since SSI's inception, Mr. Spencer has been
employed with SSI which was a C corporation. Mr. Spencer was
SSI's majority shareholder, owning 87 percent,2 at all times
relevant to the transactions in the instant case.
SPC-SC Transaction
During 1987, SSI nominally sold its South Carolina
operations to Mr. Spencer and one of SSI's top managers, Toney
Boozer (Mr. Boozer), in exchange for $1,170,000. Shortly
thereafter, Mr. Spencer and Mr. Boozer nominally conveyed those
same assets to a newly organized S corporation, SPC-SC, in
exchange for $1,170,000. Mr. Spencer caused SSI to sell its
South Carolina assets and operations in an effort to consolidate
operations and improve managerial efficiency. The foregoing
transactions (collectively, the SPC-SC transaction) are described
in detail below.
Carolina Transaction
On May 21, 1987, prior to the organization of SPC-SC, Mr.
Spencer and Mr. Boozer entered into an agreement (the Carolina
2 The record does not disclose who owned the remaining 13
percent of SSI's stock.
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