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9. In the event that a partner or partner’s spouse
ceases to devote all or a substantial part of his time
to the business of the partnership, he shall be deemed
to have filed with the partnership a Notice of Intent
to Withdraw, unless the remaining partners unanimously
agree to permit such partner to continue as a partner.
The True children received no independent legal or
accounting advice when they entered into the buy-sell agreements.
They did not know who drafted the agreements or why, in the case
of Belle Fourche, they were required to structure the purchase
with a combination of stock and debt. However, the True
children, having been exposed from childhood to Dave True’s
business philosophy, understood his reasons for including the
active participation and book value purchase price requirements
in the buy-sell agreements.
Dave True consulted with Mr. Harris, the family’s longtime
accountant and principal tax and economic adviser, and C.L.
Tangney (Mr. Tangney), Mr. Harris’s employer, before entering
into the buy-sell agreements. On one occasion, Dave True also
discussed the True Oil and True Drilling buy-sell agreements with
Claude Maer (Mr. Maer), an attorney who was assisting the True
companies on an unrelated income tax matter.
Dave True mainly consulted with Mr. Harris regarding using a
tax book value purchase price formula under the buy-sell
agreements. Mr. Harris was not a professional appraiser and had
no significant practical experience in valuing businesses.
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