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petitioner’s day-to-day management, which he found to be
difficult because he was under the constant scrutiny of his
father. He managed petitioner’s office staff of four people,
designed petitioner’s marketing catalogues, handled special
orders for customers, and designed custom-made items for
customers. He managed petitioner’s sales activities and was the
primary contact for petitioner’s biggest customer, Baker’s Aid,
in 1993, 1994, and 1995. Baker’s Aid accounted for about one-
third of petitioner’s sales in those years. Steven Klein was
very familiar with petitioner's customers and operations and had
good technical knowledge of its products. In 1993 and 1994,
Steven Klein worked long hours. Steven Klein became president
and chief executive officer (CEO) in January 1995, when Isidore
and Gertrude Klein sold their stock in petitioner. In 1995,
Steven Klein assumed more responsibility for petitioner. He
often received business telephone calls at home during 1993,
1994, and 1995.
3. Petitioner’s Redemption of Gertrude and Isidore Klein’s
Stock and Steven Klein’s Purchase of Petitioner
Around 1988, Steven Klein proposed buying Isidore and
Gertrude Klein’s stock in petitioner because he wanted to control
petitioner and to ensure that he and his children would own the
business. Steven Klein negotiated intermittently with Isidore
Klein from 1988 to 1994 to buy the stock. Isidore Klein
initially asked Steven Klein to pay $3 million for the stock.
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