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pursuant to which petitioner purchased all of the common and
preferred stock of Tri-Power from TPC and the banks.
D. The Acquisition
At a special meeting of the board, held on October 16, 1986,
petitioner's management presented the Tri-Power acquisition for
consideration by the board. Management explained that while its
investigation into Tri-Power was ongoing, on the basis of the
information then developed, management recommended that the board
authorize the acquisition of Tri-Power because the acquisition
satisfied all of petitioner's acquisition limitations.
Specifically, Tri-Power possessed oil and gas reserves located
primarily in Texas and Wyoming. Accordingly, the acquisition of
Tri-Power presented petitioner with the opportunity to expand
outside the Hugoton field and establish a Gulf Coast presence.
Further, the acquisition of Tri-Power presented petitioner with
the opportunity to expand its product base with oil reserves, as
well as to make contacts with new markets for natural gas
production. Finally, TPC's asking price, $10.5 million, fit
petitioner's budget and size limitations. Management also
explained that the proposed acquisition would be a purchase of
all the outstanding capital stock of Tri-Power, and that if
successful, petitioner would maintain the Tri-Power corporate
entity as its wholly owned subsidiary. After an extended
discussion, petitioner's board resolved:
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