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substantially less. Obviously, many of the breeding cattle
purportedly sold the partnerships were nowhere near the quality
of an “A” herd cow selling for $2,000 or $2,500.35 Indeed, the
registered status and parentage of a substantial number of
breeding cattle the partnerships purportedly purchased and owned
are either dubious or unknown.
We conclude the partnerships’ stated purchase prices for
their “breeding cattle” were many times the actual fair market
value of those “cattle”.36 Thus, each partnership’s stated
35There is no credible evidence in the record from which the
Court can estimate the actual number of “A” herd cattle annually
in the Hoyt herd from 1987 through 1992. The Court does not
believe Jay Hoyt’s claim that, during 1987, of the 24,000 to
29,000 total cattle he estimated were present in the Hoyt
organization herd, approximately 40 percent were “A” herd
animals. The Court thinks that, in all likelihood, the number of
“A” herd animals in the Hoyt organization herd had greatly
declined by 1987 or 1988. Among other things, when Ranches was
liquidated, Ric and Steve Hoyt took some of the cattle Ranches
previously either owned and/or managed. Moreover, in a
memorandum dated Sept. 17, 1990, to the Hoyt organization’s
cattle and ranch managers, Jay Hoyt advised them that the “A”
herd concept was being abandoned, because, according to Jay Hoyt,
no herd sire prospect (i.e., essentially a potentially very high
quality breeding bull) had been sold in the last 2 years.
36The record contains a marketing plan for Management. This
plan notes that in order for Management to make a profit on its
bulls, it will have to sell them for the following specified
prices: (1) A weaner bull for $800, (2) a 10- to 12-month-old
bull for $1,050, (3) a 13- to 15-month-old bull for $1,320, and
(4) a 16- to 18-month-old bull for $1,600. The plan goes on to
state that for bulls that cannot be sold at a profit, one option
is to market those bulls to “Time Share” which will “pay” $3,500
per bull. However, it states, “Time Share” was not planning to
buy a great number of bulls from Management in 1989. The record
further reflects that, at about this time, the Hoyt organization
(continued...)
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