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Background
At the time of filing the petition, petitioners resided in
Naples, Florida. Petitioners were the only partners of Arbeit &
Co. (Arbeit), a general partnership.2 NMG, Inc. (NMG), was a
Delaware corporation which did business as George Rice & Sons.
On March 31, 1992, Arbeit and NMG executed an agreement
which required that Arbeit surrender 2,500 shares of NMG series A
preferred stock, a subordinated promissory note, and certain
previously issued NMG warrants. Pursuant to this same agreement,
NMG issued to Arbeit a senior subordinated promissory note of $5
million and a junior subordinated promissory note of $2.4
million. NMG also issued a warrant which gave Arbeit the right
to purchase 772.14 shares of NMG class A common stock at an
exercise price of $1 per share. Before November 12, 1993,
Arbeit, Sieben Investment Co., Berkeley Atlantic Income, Ltd.,
and BG Services, Ltd., held warrants to purchase NMG class A
common stock in the following amounts:
Warrantholder Number of Shares
Arbeit 772.14
Sieben 18.36
Berkeley 115.41
BG Services 230.82
Total 1,136.73
Before December 22, 1993, NMG’s outstanding stock consisted
2Arbeit’s sole purpose was to act as a nominee for
petitioners, as trustee of the Gerald Rauenhorst Revocable Trust.
This trust was a revocable grantor trust, and its assets were
treated as owned by Mr. Rauenhorst under sec. 676.
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Last modified: May 25, 2011