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of partnership, after the return of capital, liquidation rights
of the partners were equal. Periodic distributions of income
were to be made, if at all, in a ratio of 75 percent to 25
percent in favor of petitioner. Losses were allocated in
proportion to each partner’s capital account, except that in
1987, the first $75,000 of losses was allocated to Tellurogenic.
On January 23, 1987, approximately 1 month after Archimedes
was formed, the Onex Farms Partnership (Onex Farms) was formed,
apparently as proposed by Dr. Chambers. Onex Farms originally
consisted of three general partners: (1) Lever, Inc. (Lever), a
corporation organized, controlled, and owned entirely by
petitioner;2 (2) Pencot Farm Management, Inc.3 (Pencot), an
entity organized and controlled by Dr. Chambers; and (3)
Archimedes. Onex Farms purchased and held title to a large
peanut and cotton farm in Georgia (the Georgia farm), which was
operated pursuant to an arrangement with a local farmer. Profits
and losses from farming operations were divided equally between
Onex Farms and the farmer.
2 Although it was named as a partner in Onex Farms in the
Jan. 23, 1987, agreement, Lever was not actually incorporated
until Feb. 4, 1987.
3 “Pencot” is spelled as such on some documents in the
record but spelled “Pentcot” or “Pentecot” in others.
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