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percent of Buckeye's shares. Sometime thereafter, he was elected
chairman of the board of Buckeye.
In 1981, Mr. Davis (and others) founded Big Bite, Inc. (Big
Bite), to promote fast food franchises serving pita sandwiches.
Mr. Davis was a primary investor in Big Bite. In 1983, he was
elected to Big Bite's board of directors. By 1982 or 1983, Big
Bite expanded to a chain of approximately 30 restaurants. In the
mid-1980's, Big Bite's restaurants fell out of favor with
consumers.
Mr. Davis also was instrumental in the formation and
financing of other corporations traded on the national over-the-
counter market. One of these corporations was Strata. Strata
was in the oil and gas exploration and drilling business. Mr.
Davis was the first chairman of the board of Strata and one of
its three majority shareholders.
Over the years, Mr. Davis solicited investments in the
various entities he promoted from a large group of potential
investors. Mr Davis gave away shares he personally held in the
promoted entities (1) to ensure important potential investors
would be enthusiastic to invest in the next venture/entity he
promoted and (2) in the hope that these investors would help Mr.
Davis in his promotion of certain businesses.
Petitioner held a substantial number of shares in the
entities he promoted with a zero basis in those shares. Thus, he
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