Law Offices--Richard Ashare, P.C. - Page 23

                                       - 23 -                                         

          compensation to the value of his uncompensated services as of the           
          end of each year.  The board, for example, considered the value             
          of Mr. Ashare's uncompensated services as of December 31, 1990,             
          and resolved specifically that Mr. Ashare's compensation for that           
          year was limited to services performed during that year.                    
          Petitioner definitely had the opportunity, the means, and a                 
          strong tax incentive to inflate Mr. Ashare's compensation for               
          that year.  It did not, which indicates to us that the board was            
          set on establishing Mr. Ashare's compensation at its fair value.            
               In this regard, the board resolved that Mr. Ashare was                 
          entitled to receive compensation of $1,750,000 during 1993 for              
          his past and present services.  The board, through the exercise             
          of its sound business judgment, resolved that Mr. Ashare was                
          entitled to that amount of compensation, and we decline to second           
          guess the board's wisdom.  The board knew that 1993 was the last            
          year from which petitioner could use an NOL to recover all of the           
          taxes which it paid for 1990 and that paying petitioner the                 
          $1,750,000 would allow it to recover all those taxes.  The board            
          also knew that petitioner had a continuing obligation to provide            
          significant services on the Gentile case for many years after               
          1993, that petitioner's revenues in post-1992 years would                   
          practically be nonexistent, and that petitioner would not have              
          any resources to pay Mr. Ashare future compensation.                        

Page:  Previous  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  Next

Last modified: May 25, 2011