- 4 -
Bess. Petitioner has two officers: Mr. Ashare (president and
treasurer) and Mrs. Ashare (secretary). Mr. Bess is petitioner's
(and Mr. Ashare's) principal tax adviser; among other things, Mr.
Bess advised Mr. Ashare on petitioner's incorporation in 1974.
Mr. Ashare has focused almost exclusively on one case (the
Gentile case) during his employment by petitioner. In that case,
Mr. Ashare, on behalf of petitioner, represented a class of 9,000
to 10,000 persons known as the Policeman and Fireman Retirement
System of the City of Detroit. The class retained petitioner on
a contingent fee basis to sue the city of Detroit (the city) for
a correct computation of employee pension benefits.
In 1989, following prolonged litigation, the city agreed to
pay the class $70 million to settle the Gentile case. The court
overseeing the litigation awarded petitioner $12,567,623 of the
settlement proceeds as legal fees. Petitioner received these
fees from 1989 through 1992. Petitioner reportedly paid
compensation of $10,492,500 to Mr. Ashare during the same years.
Except for its work on the Gentile case, petitioner's workload in
and after 1990 was and is minimal. Petitioner generally began to
wind down its business after it settled the Gentile case, and its
only case as of December 31, 1993, was the Gentile case.
Petitioner reported on its 1993 Form 1120, U.S. Corporation
Income Tax Return, that it paid Mr. Ashare $1,750,000 in
compensation. Mr. Ashare lent petitioner $916,756, and
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011