Coggin Automotive Corporation - Page 10

                                       - 10 -                                         
          the note and $107,000 in cash to Andrews Automotive.  Finally,              
          Andrews Automotive contributed the note and the $107,000, while             
          Imports contributed the assets of Coggin Andrews Honda (valued at           
          approximately $680,000), to the partnership, each receiving in              
          exchange a 50-percent interest in the partnership.                          
               Under the terms of the Coggin-Andrews partnership agreement            
          (the partnership agreement), Imports was designated the                     
          partnership’s managing partner.                                             
          The 1993 Restructuring Transactions                                         
               Petitioner’s board of directors determined that because (1)            
          the general managers wanted to own a direct interest in, and                
          participate in, the profits of a stand-alone partnership                    
          dealership, and (2) Mr. Coggin wanted (as part of a succession plan         
          and to provide liquidity to cover estate taxes) an effective way in         
          which the general managers could buy him out, it would be                   
          advantageous to change the structure of petitioner from a C                 
          corporation to an S corporation and to operate the dealerships              
          through partnerships similar to the Coggin-Andrews partnership.             
          Consequently, during the latter part of May 1993, the board adopted         
          a plan to change petitioner’s structure and that of the                     
          subsidiaries pursuant to a series of transactions (the 1993                 
          restructuring), as outlined in a “talking points paper” prepared by         
          KPMG Peat Marwick (KPMG).                                                   

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011