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substantial working capital in order to permit it to
make use of Colonial’s ICC authority;
As previously stated, Colonial’s ICC operating authority had
no value, and Central never used the ICC operating authority
acquired from Colonial in the merger. Central never operated as
a packaged-freight carrier.
For purposes of the merger, Mr. Odom determined that the
premerger value of Central’s stock was $417.45 per share. He
then determined that the net asset value of Colonial, which was
being acquired by Central, was $7,442,6607 and that the number of
Central shares necessary to compensate Mr. Honbarrier for his
Colonial stock was 17,840 shares. Pursuant to the merger, Mr.
Honbarrier’s 245 shares of Colonial stock were exchanged for
17,840 shares of Central stock. The merger changed Central’s
shareholder ownership as follows:
Before Merger: After Merger:
Shares Percent Ownership Shares Percent Ownership
Mr. Honbarrier 65,48472.0396 83,324 76.6268
Mrs. Honbarrier 3000.3300 300 0.2760
Gary L. Honbarrier 12,55813.8152 12,558 11.5486
Linda Embler 12,558 13.8152 12,558 11.5486
Total 90,900 100.0000 108,740 100.0000
On December 22, 1993, the board of directors of Central also
declared a $7 million distribution payable to its shareholders on
December 31, 1993. The shareholder distribution was allocated on
a pro rata basis among the shareholders based on their stock
7This figure includes $175,000 for Colonial’s ICC operating
authority. As we previously found, the ICC operating authority
had no value and should not have been included in Colonial’s net
asset value.
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