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February 21, 1996, petitioner’s defense counsel again advised
petitioner that “there is some possibility that the Plaintiff
will somehow structure a case with other individuals or with
other issues which could possibly be filed against * * *
[petitioner] and the other defendants”.
Bostwick advised petitioner not to plan to pay for
contingencies out of current earnings and profits and to set
aside funds in the amount that petitioner’s defense attorneys
advised. At the February 18, 1994, and February 24, 1995, board
meetings to review petitioner’s capital reserves, Bostwick
advised petitioner to hold sufficient capital reserves to serve
as a contingency fund for situations that required legal counsel.
Business Expansion Plans
Petitioner was interested in expanding into McKinney, Texas,
because it was a rapidly growing market. McKinney is about
30 miles south of Sherman on a major thoroughfare. Petitioner
has a centralized warehouse that could service the store in
McKinney and the surrounding area.
On May 7, 1993, petitioner’s board met to discuss the
possibility of opening a store to sell furniture in the area of
McKinney. Sam Knight and David Gunn were appointed to
investigate the possibilities further by viewing sites for the
new store. Thereafter, Sam Knight and David Gunn contacted Kelly
Davis (Davis), a real estate agent, to inquire about available
properties in McKinney.
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Last modified: May 25, 2011