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Petitioner is engaged in the trade or business of selling
and servicing new and used vehicles.3 Roundtree Automotive
Group, Inc. (Roundtree), is a corporation engaged in the trade or
business of purchasing and operating automobile dealerships and
providing consulting services to these dealerships.4 Frank
Stinson (Mr. Stinson) was involved in the operations of Roundtree
during the years 1987 through 1994.
Roundtree originally purchased all the stock of petitioner
in August of 1987. Consistent with Mr. Stinson’s and Roundtree’s
policy of management, petitioner filled the position of executive
manager of its dealership with one of Mr. Stinson’s long-term
employees, Dennis Menholt (Mr. Menholt). As part of his
employment by petitioner, Mr. Menholt was allowed to purchase,
from 1987 through 1994, 25 percent of the stock of petitioner.
In 1994, Mr. Menholt was the general manager of petitioner’s
automobile dealership located in Billings, Montana, and Mr.
Stinson was the president of Roundtree. Mr. Stinson participated
in the management of petitioner’s business, particularly in
advertising and sales training. Roundtree received monthly
payments of $22,000 for management services it performed for
3Petitioner was formerly known as Frontier Chevrolet
Company. References to petitioner include events which occurred
when it was known as Frontier Chevrolet Company.
4Roundtree was formerly known as FS Enterprises, Inc.
References to Roundtree include events which occurred when it was
known as FS Enterprises, Inc.
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Last modified: May 25, 2011