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corporation to build and operate a gathering system for the
Donkey Creek field in the Powder River Basin. Dave True and the
other local operators organized Bell Fourche because they had
encountered difficulty in getting their crude oil to market from
newly discovered, remote fields. They therefore decided to build
their own pipeline, rather than transport crude oil by truck to
trunk lines or connect new wells to existing gathering pipelines
owned by others. In later years, Belle Fourche substantially
expanded its operations to serve other fields as a common carrier
gathering system with multiple outlets to trunk lines.
Belle Fourche generated substantial cash-flow from fees for
transporting crude oil. Its customers included both True
companies and unrelated entities. However, the majority of its
business was from unrelated entities.
In the 1960's, Dave and Jean True acquired full ownership of
the shares of Belle Fourche through redemptions of the share
interests of the other holders.7 There were no buy-sell
agreements that would have dictated the redemption prices for
Belle Fourche stock. All but one of the redemptions were at
preceding yearend book value (determined on a GAAP basis, see
7Petitioners’ direct testimony characterized these
transactions as stock purchases by Dave and Jean True, while the
appraisal of Standard Research Consultants (SRC)(see infra pp.
37-39) characterized them as corporate redemptions. The SRC
appraisal provided more detailed information regarding the
transactions and appears to be more reliable.
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