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As discussed previously, the Court does not believe that
many of the breeding sheep purportedly sold by Barnes Ranches to
these partnerships, in fact, existed. Experienced, longtime
sheep breeders, like the Barnes family, would not have then
maintained such inadequate records on the numerous individual
breeding sheep they had purportedly sold to and managed for each
partnership. The record reflects how important proper record
keeping is in the breeding of high quality, registered purebred
sheep. Each sharecrop agreement further required Barnes Ranches
to maintain sufficient records allowing it to identify and keep
track of a partnership's breeding sheep at all times. Further,
if the stated numbers of breeding sheep these partnerships
"owned" actually existed, then Mr. Hoyt would not have accepted
such deficient record keeping practices with respect to each
partnership's "breeding sheep". Not only was Mr. Hoyt the
promoter and managing general partner of each sheep partnership
since its formation, but he had extensive experience in the
breeding of purebred cattle and the operation of similar cattle
breeding partnerships.
Notwithstanding petitioners' arguments to the contrary, we
conclude that many of the breeding sheep the partnerships
allegedly purchased from Barnes Ranches did not, in fact, exist.
E. Whether a Partnership's Stated Purchase Price Reasonably
Approximated the Sheep's Fair Market Value
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