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unrelated third parties in arm’s-length transactions.34 Mrs.
Schnitker testified as to the prices she obtained in selling
cattle as Management’s cattle marketing director from 1987
through 1990. Her sales included sales to feedlots (whereby the
cattle essentially would be sold at meat prices) and other sales
to Shorthorn breeders. She related that the best quality (i.e.,
“A” herd) mature breeding cows with registration papers could go
for a price as high as $2,000 or $2,500, depending upon the
individual cow’s quality. However, lesser quality cattle without
registration papers (i.e., “B” herd or lower) would sell for
34The record discloses that the Hoyt organization contrived
certain transactions pursuant to which small numbers of breeding
cattle (possibly “belonging” to some of the cattle-breeding
partnerships) ostensibly were sold for high prices. For
instance, in an interoffice memorandum dated Dec. 9, 1985, Jay
Hoyt outlined plans to have his brother Bob Hoyt and the
brother’s business associate “purchase” a heifer for $19,000 at
one of the Hoyt organization’s cattle sales to “help our sales
average”. This memorandum further states that (1) Ranches would
provide the brother and the brother’s business associate with the
funds to “purchase” the heifer and (2) the brother and business
associate would “transfer” the heifer back as their capital
contribution to a Timeshare partnership. In another instance, in
his memorandum dated Dec. 2, 1991, to various Hoyt organization
workers, Jay Hoyt instructed the workers to have the partnership
representatives line up two individuals to buy two Timeshare
bulls at the Red Bluff and Klamath Falls cattle sales. These two
bulls, Jay Hoyt stated, should “sell” for $4,500 to $5,000
apiece. He added that if the money had to be provided to the two
individuals, the workers should take it out of the General
Partners’ Office (an office in the Hoyt organization) and should
get the money back to the General Partners’ Office by deducting
the money out of the Feedlot Co.’s (another entity in the Hoyt
organization) first check from the Red Bluff and Klamath Falls
sales. At any rate, the Court finds the bona fides of these and
other similar “transactions” to be highly suspect and
questionable.
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