Norwest Corporation and Subsidiaries, Successor in Interest to Davenport Bank and Trust Company and Subsidiaries - Page 10




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          9,665,713 shares of its common stock for the stock of DBTC (other           
          than fractional shares and shares with respect to which                     
          dissenter's appraisal rights were exercised and for which $33,341           
          was paid) and then receiving all the stock of New Davenport in              
          exchange for the stock of DBTC.                                             
               Following the transaction, New Davenport carried on a                  
          banking business.  New Davenport's main office was the same                 
          office as DBTC's, and New Davenport's branches were at the four             
          locations at which DBTC had formerly operated (not including the            
          main office) and at each of the three locations at which BBNA had           
          formerly operated (including the location that had been BBNA’s              
          main office).  New Davenport offered a wider array of products              
          and services than DBTC had offered before the transaction and               
          continued DBTC’s tradition of being a charitable and community              
          leader.                                                                     
               DBTC's board and management anticipated that the transaction           
          would produce significant long-term benefits for DBTC and its               
          shareholders, among others.                                                 
          3. Costs Incurred by DBTC in 1991                                           
               During 1991, DBTC paid L&W $474,018 for services rendered              
          ($460,000) and disbursements made ($14,018) during the year.                
          DBTC deducted the $474,018 on its 1991 Federal income tax return.           
               Petitioner concedes that DBTC's $474,018 deduction was                 
          improper, alleging that the deduction should have been $111,270.            





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