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capital of Jerry. The $200,000 in checks written by Mattel were
treated on Mattel’s 1996 records as notes payable to TSI. Mattel
changed that treatment in 1997 to report the checks as notes
payable to Jerry.
The balance sheets of TSI for 1995 and 1996 and the balance
sheets of Inter-Con for 1995, 1996, and 1997 showed no loans to
shareholders. Mattel’s balance sheets for the periods ended
September 30, 1996 and 1997, also showed no loans to
shareholders.
Payments Related To Conquest Sale
In 1981, Jerry and Paul Walker (Walker) incorporated
Conquest, and they equally owned all of Conquest’s stock until
they sold the stock in 1988. On or about June 10, 1988, Walker,
Jerry, Penta Enterprises, Inc. (Penta), Beaulieu of America,
Inc., and D&W Carpet & Rug Co., Inc., entered into a stock
acquisition agreement (stock acquisition agreement) providing,
inter alia, that (1) Walker and Jerry shall sell to Penta 100
percent of the issued and outstanding capital stock in Conquest;
(2) the closing of the sale shall take place on or about June 28,
1998; (3) the parties shall enter into “Non-Compete Agreements,”
“Employment Agreements,” “Promissory Notes,” and “Guaranty
Agreements” substantially in the form attached to the Stock
Acquisition Agreement.
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Last modified: May 25, 2011