Flint Industries, Inc. and Subsidiaries - Page 23




                                       - 23 -                                         
          waiver, and was made "to create a sound financial basis for                 
          future operations * * * and to recapitalize G�nther."                       
               Sometime between January and April 1994, petitioner finally            
          found a purchaser for G�nther.  Robert P. Romano, an individual             
          who had worked for one of Flint's other electronics subsidiaries            
          and had started an electronics company of his own, agreed to                
          purchase G�nther through GAI, a corporation formed to acquire               
          G�nther.                                                                    
               Under the terms of a sale agreement dated April 13, 1994,              
          GAI gave Flint Electronics a promissory note for DM 5,000,000,              
          Flint assumed all of G�nther's remaining bank debt ($3,709,460)             
          and forgave the remaining intercompany receivable balance                   
          ($761,228), and Flint Electronics relinquished its right to                 
          reinstate the waived intercompany receivable ($11,429,665).                 
          GAI’s promissory note provided for minimum principal and interest           
          payments beginning in FYE May 31, 1996, and specified that the              
          payment schedule would accelerate if GAI sold assets other than             
          in the ordinary course of business or became profitable.                    
          Petitioner bargained for the note to discourage GAI from                    
          liquidating G�nther.                                                        
               GAI retained Mr. Nowell as gesch�ftsf�hrer.  In the years              
          following the sale of G�nther, the company reported a small                 
          operating loss followed by marginal profits.  In 1996, the first            
          year payment under the promissory note became due, GAI/G�nther              







Page:  Previous  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  Next

Last modified: May 25, 2011