Estate of H.A. True, Jr. - Page 230




                                       - 30 -                                         
               dividends or cash payments to him or herself or other                  
               family members shall not be an active participant nor                  
               retain ownership. * * *  A non-active family member-                   
               owner may designate his or her spouse who does work                    
               full time in the business to be considered for                         
               qualification of the family member-owner as an active                  
               participant. * * *                                                     
              B.  First Transfers of Interests in Belle Fourche, True Oil,            
              and True Drilling to True Children                                      
              In the early 1970's, the True children acquired interests in            
          three True companies:  Belle Fourche, True Oil, and True                    
          Drilling.  Dave True’s purpose in enabling his children to                  
          acquire these interests was to perpetuate the family businesses             
          by fostering the children’s interest in owning and managing them.           
          Dave True was in good health in 1971 and 1973 when he                       
          orchestrated these acquisitions by his children.                            
              In August 1971 (as described supra pp. 17-18), Belle Fourche            
          sold stock, representing a 1-percent ownership interest, to each            
          True child for a combination of cash and loans made to the                  
          corporation by the child.12  At that time, the True children                
          ranged from approximately 21 to 31 years of age.  The purchase              
          price ($38.69 per share) was based on Belle Fourche’s book value            
          as of the end of the preceding fiscal year, less dividends paid             
          within 2-1/2 months thereafter.  Subsequently, the stockholders             



               12Mr. Harris testified that Dave True sold 1-percent                   
          interests in Belle Fourche to each of his four children.                    
          However, the minutes of the Belle Fourche Board of Directors                
          meeting and the SRC appraisal indicate that the company sold its            
          stock to the children.                                                      





Page:  Previous  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  Next

Last modified: May 25, 2011