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properties.4 In return, Great Western agreed to remit to Mr.
Rogers 95 percent of all proceeds it received on the sale of such
properties. The January 15, 1991, agreement was contingent on
the consummation of the agreements between Vista and AMH and on
Great Western's resale of nonhospital properties. Also, on
January 15, 1991, Ms. Hanna, on behalf of Great Western, executed
a promissory note requiring Great Western to pay Mr. Rogers 95
percent of the proceeds received on the sale of nonhospital
properties. On his 1991 Federal income tax return, Mr. Rogers
reported the January 15, 1991, transaction as an installment sale
of contract rights valued at $9,804,000.5
On January 23, 1991, the sale of the hospitals from AMH to
Vista closed. On that same day, the nonhospital properties were
transferred by Grant Deeds from Arroyo Grande and Circle City to
Great Western. Great Western neither paid any remuneration nor
gave anything of value to AMH or its subsidiaries for the
nonhospital properties.
On February 1, 1991, Great Western leased to Vista a medical
office building located on one of the nonhospital properties for
$143,050 in rent, payable in equal semiannual installments of
4 The Jan. 15, 1991, agreement refers to properties described
in "Exhibit A", but Exhibit A is not part of the record.
However, it is clear that "Exhibit A" contained a description of
the nonhospital properties.
5 See supra note 2.
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