- 5 - portion of the VARI to the customer or by reducing that customer’s service fees. In 1992, ZSI transferred to its customers, by direct payment or reduction in fees, $117,426, or 10.24 percent, of the $1,147,100 in gross VARI it received; ZSI retained the other $1,029,674, or 89.76 percent, of the gross VARI received. Although ZSI was profitable in 1991 and 1992, petitioner expected ZSI would have to share with its customers substantially more of the VARI in future years. Petitioner feared that the presorting division’s low profit margin and tough competition, combined with a further reduction in retained VARI, would strain ZSI’s finances. Gifts of ZSI Stock Immediately prior to the gifts at issue herein, ZSI’s stock was held as follows: 2(...continued) barriers to entry into ZSI’s industry. In 1992, ZSI purchased a competing company with small profits for $100,000 to $125,000 and procured a covenant not to compete from the seller. By the end of 1992, ZSI owned at least three current covenants not to compete.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011