Estate of Mary D. Maggos - Page 10

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                    price of $3,000,000 constituted a sale in the                     
                    ordinary course of business (a transaction that                   
                    was bona fide, at arm’s length, and free from any                 
                    donative intent) within the meaning of Treas. Reg.                
                    � 25.2512-8.                                                      
                              B.  Whether Nikita, E. Lawrence                         
                    Helm, CPA (Helm) and Victor Bezman, Esq.                          
                    (Bezman) engaged in a conspiracy to defraud                       
                    Petitioner in connection with the redemption                      
                    of her PCAB stock.                                                
                              C.  Whether the redemption of                           
                    Petitioner’s PCAB stock at a stated                               
                    redemption price of $3,000,000 constituted a                      
                    bad business bargain by Petitioner,                               
                    irrespective of whether she was defrauded by                      
                    Nikita, Helm and/or Bezman.                                       
                    2.  Whether the fair market value of Petitioner’s                 
               56.7% interest in PCAB as of May 1, 1987, was                          
               $3,000,000 (the stated redemption price), or was                       
               $8,056,000 as determined by Respondent.                                
          Civil Litigation                                                            
               In 1994, after receiving advice from her daughter, Catherine           
          Adkins, decedent ceased her association with Robert Hite, her               
          attorney of many years, and retained new counsel.                           
               Subsequent to retaining new counsel on May 31, 1994,                   
          decedent disinherited her son, Nikita Maggos.  Based on advice              
          from new counsel, on August 23, 1994, decedent commenced suit in            
          the U.S. District Court for the District of Hawaii against Nikita           
          Maggos and PCAB (Civil No. 94-00649ACK) (the District Court                 
          litigation).  On August 17, 1995, decedent commenced suit in the            
          Circuit Court of the First Circuit of Hawaii against Helm, Huber,           

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