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petitioner and Mr. Hanania entered into an agreement whereby Mr.
Hanania was given the right to acquire the Acura dealership over 7
years. As part of the agreement, Mr. Hanania had the option to
obtain the franchise rights of the dealership for an additional
$700,000.
In 1998, petitioner sold its 50-percent interest in the
partnership to Mr. Hanania for $2,397,500. Mr. Hanania borrowed
the entire purchase price from petitioner, securing his loan with
his shares of stock in his solely owned corporation.
On October 1, 1994, Mr. Seth purchased Mr. Andrews’ 5-percent
limited partnership interest in CN Motors, Ltd., for $201,138.
On January 1, 1996, CN Motor Corp., CO Motor Corp., CH Motor
Corp., CA Motor Corp., and CFP Motor Corp. merged into CP-GMC Motor
Corp. Simultaneously therewith, CP-GMC Motor Corp. changed its
name to CF Motor Corp. As of that date, Mr. Coggin was the
majority shareholder (75 percent) of CF Motor Corp. Most of the
other 16 shareholders were key employees of petitioner; none of
these employees had an ownership interest greater than 4.5 percent.
In 1997, petitioner agreed to sell the stock of CF Motor
Corp., as well as the assets of the dealerships, to Asbury
Automotive of Jacksonville, L.P. (Asbury). As part of the
acquisition, petitioner agreed to sell to Asbury its 50-percent
interest in the Coggin-Andrews partnership. Mr. Andrews objected
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