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In support of respondent’s position that the right to sale
proceeds had “ripened to a practical certainty” at the time of
the contributions, he cites: (1) The September 28, 1993, letter
of intent from WCP expressing its intention to purchase all the
issued and outstanding stock of NMG; (2) the October 22, 1993,
resolution by WCP’s board of directors, which authorized its
officers to negotiate and enter into the agreement for the
purchase of all the issued and outstanding capital stock of NMG;
and (3) a valuation report prepared by Houlihan, Lokey, Howard, &
Zukin (Houlihan Lokey), which was attached to petitioners’ 1993
return and which opined that, as of November 12, 1993, there was
little chance the transaction involving WCP would not close on or
before December 31, 1993. Those items might be particularly
relevant for determining whether the stock warrant purchase
ripened to a practical certainty; however, none of those items
alone, or in combination, show that the donees were legally
bound, or could be compelled, to sell their stock warrants.
The letter of intent merely confirms WCP’s “intention * * *
to purchase all of the issued and outstanding shares of the
capital stock of N.M.G., Inc., * * * from the stockholders of the
Company”; however, it was not an offer to purchase those shares
as respondent claims. Although the letter of intent outlines the
terms and conditions of the proposed purchase and sale of stock,
including the aggregate purchase price and the repayment of
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