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sell its Florida pest control companies in order to consolidate
operations and motivate management. The foregoing transactions
(collectively, the SPC-FL transactions) are described in detail
below.
Florida Transaction
On August 8, 1990, the purchasers entered into an agreement
(the Florida Purchase Agreement) to purchase, as of August 1,
1990, certain assets of SSI, Art Brown Pest Control, Inc., Reese
Pest Control Co., and Reese Pest Control Co. of Vero Beach
(collectively referred to as SSI)13 in exchange for $1,150,000.
This transaction is sometimes referred to herein as the Florida
transaction. SSI engaged in the pest control business in and
around Sanford, Melbourne, and Vero Beach, Florida. Mr. Spencer
drafted the original documents relating to the Florida
transaction. Those documents, however, were lost in a move and
are therefore unavailable. Redrafted copies of the purchase
agreement and promissory note were submitted into evidence.
Pursuant to the Florida Purchase Agreement, the purchasers
assumed liabilities in the amount of $124,351.98, and acquired
(1) tangible assets in the amount of $172,392.16, and (2)
13 The record does not disclose the exact relationship between
SSI, Art Brown Pest Control, and the Reese entities; it appears,
however, that SSI either owned or controlled such entities. Both
petitioners and respondent have characterized this transaction as
between SSI and the purchasers, and we accept such
characterization.
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