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(the banks). Tri-Power also owed $46.5 million to its parent,
TPC.
On November 18, 1986, pursuant to a Plan of
Recapitalization, Tri-Power underwent a debt restructuring.
Pursuant to the plan, Tri-Power issued 46,250 shares of preferred
stock having a par value of $100 per share to each of the two
banks in full satisfaction of Tri-Power's indebtedness to the
banks. Also pursuant to the plan, Tri-Power issued 5,000 shares
of preferred stock having a par value of $100 per share to TPC in
full satisfaction of its intercompany debt to TPC. Accordingly,
when petitioner acquired Tri-Power on November, 21, 1986, TPC
owned 100 percent of Tri-Power's common stock and 5,000 shares of
its preferred stock. Tri-Power's remaining shares of preferred
stock were owned by the banks.
Tri-Power's principal place of business was in Houston,
Texas, and its properties were located primarily in Texas and
Wyoming. At the time of its acquisition by petitioner, Tri-Power
owned seven groups of properties, six of which were acquired by
way of merger (the properties owned by Tri-Power, and acquired by
petitioner, will be referred to as the Tri-Power properties).
Tri-Power's NOL's by that time were $84,817,122.
During 1986, Tri-Power began seeking investors to help
develop seven different prospects in various locations throughout
the Rocky Mountains, the Permian Basin, and the Gulf Coast.
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