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sale of 100 percent (1,000 shares) of the common stock of BFI to
Norway.5 According to the agreement, the purchase price was $9
million. The parties used an internal financial statement of the
assets and liabilities of BFI to arrive at this figure.6 The
financial statement provided information on the financial status
of BFI relevant to December 31, 1995. As of that date, the value
of the lawsuit was not ascertainable, was not listed in the
financial statement, and did not figure in the $9 million
purchase price. The agreement states that closing was to occur
at a time convenient to the parties, but “will occur not later
than February 27, 1996”.
The agreement also addresses the disposition of the lawsuit
filed in September 1995. Under the paragraph entitled
“Contemplated Transactions Out of the Ordinary Course of
Business”, it states: “Purchaser acknowledges that the following
transactions may occur between the Shareholders and the Company
prior to the Closing Date”. A subparagraph then authorizes BFI
to assign its rights under the lawsuit to its selling
shareholders.
5The acquisition was structured as a stock sale to preserve
BFI’s fishing rights, to facilitate the transfer of other assets
to Norway, and to provide Norway with the revenues from the “A”
fishing season conducted at the beginning of 1996.
6The agreement required an adjustment to the purchase price
upon the completion of an audited financial statement of the
assets and liabilities of BFI. On June 20, 1996, a final
purchase price of $9,325,000 was agreed upon.
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