CGF Industries, Inc. and Subsidiaries - Page 37




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          dividend or capital gains tax.  One year later in 1987, Mr. Page            
          led an in-depth discussion regarding Lincoln's current and future           
          operations at Lincoln's annual board meeting.                               
               In February 1988, during Lincoln's board meeting, Mr. Page             
          moved that Lincoln buy 10-year term interests for up to                     
          $6 million.  He also moved to have Lincoln redeem $5,440,000                
          worth of its preferred stock no later than March 31, 1988.  An              
          addendum to Mr. Page's first letter followed in March 1988.  Then           
          on March 28, 1988, Lincoln redeemed its preferred stock, and 3              
          days later, on March 31, 1988, Lincoln and the Lincoln Family               
          Trusts formed four of the nine Lincoln Partnerships.                        
               In April 1988, Mr. Page prepared yet another letter fleshing           
          out the transactional details of his plan.  Approximately 3                 
          months later in July 1988, CGF made distributions to its                    
          shareholders and formed five limited partnerships with the CGF              
          Family Trusts.  Then in early October 1988, at one of Lincoln's             
          board meetings, Mr. Page moved that Lincoln purchase term                   
          interests in up to five additional partnerships.  He also moved             
          to have Lincoln declare another dividend.  The dividend distribu-           
          tion took place on October 31 and approximately 1 month later on            
          December 9, 1988, Lincoln and the Lincoln Family Trusts created             
          five more partnerships.                                                     
               This chronology of events shows a definite pattern.  Each              
          time petitioners formed partnerships and acquired term interests            
          therein, distributions were paid so that their shareholders                 
          could, likewise, invest in such partnerships and acquire the                

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