John W. Banks, III - Page 8




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               On August 8, 1986, the bankruptcy court appointed a trustee,           
          John Roberts, to administer the estate.  Mr. Roberts decided not            
          to have the estate develop either Frenchtown Hills or the Auburn            
          Bluffs property.  Mr. Roberts asked the bankruptcy court on                 
          August 15, 1986, to approve the estate’s employment of a firm to            
          market and sell Frenchtown Hills.                                           
               Each lot in Frenchtown Hills was sold during the estate’s              
          administration at its fair market value.  Petitioner did not                
          object to those values.  The estate was unable to sell                      
          petitioner’s Auburn Bluffs’ partnership interest.  Instead, the             
          trustee reached a stipulated settlement with Auburn Bluffs’                 
          partners.  Petitioner paid $10,000 to the estate for the claim              
          against the DOE.                                                            
               At the request of Mr. Roberts, Michael Owen, a certified               
          public accountant, prepared fiduciary income tax returns for each           
          of the estate’s taxable years ended June 30, 1986 through 1990,             
          and for a short period ended on December 31, 1990.  Mr. Owen                
          obtained from Mr. Roberts, petitioner, and/or third parties                 
          information as to the bases of property sold during the relevant            
          years.  Mr. Roberts filed with the Commissioner each of the                 
          returns prepared by Mr. Owens.  The Commissioner destroyed those            
          returns.  Mr. Roberts retained unsigned copies of the returns.              
               On April 19, 1993, Mr. Roberts filed his final report and              
          proposed distribution with the bankruptcy court as to the estate.           






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