Ernst L. Meier - Page 4




                                        - 4 -                                         
               Trial evidence suggests that the tenant farmers to whom                
          Garland Farms leased the farm properties represented high credit            
          risks and could not obtain financing from commercial banks to               
          finance their farm operations.                                              
               On April 3, 1992, Blackland was incorporated in Arkansas for           
          the purpose of making loans to the tenant farmers to whom Garland           
          Farms leased farm properties.                                               
               During 1994, 1995, and 1996, petitioner was secretary of               
          Blackland, and various employees of Garland Farms were the                  
          nominal shareholders and other officers of Blackland and were               
          involved, along with petitioner, in the day-to-day operations of            
          Blackland.  Blackland, however, did not treat any of its                    
          officers, nor anyone else, as employees, and Blackland did not              
          pay any wages.  Blackland’s balance sheets for December 31, 1992,           
          through December 31, 1996, reflect that its nominal shareholders            
          paid a total of $1,000 for their stock in Blackland.                        
               The record does not reflect that petitioner owned any direct           
          stock interest in Blackland.  As indicated, however, petitioner             
          appears to have been in control of Blackland, and petitioner                
          provided Blackland with most of the funds Blackland needed to               
          make loans to the tenant farmers.                                           
               In April of 1992, petitioner contends that he, as creditor,            
          entered into a financing arrangement with Blackland that                    
          constituted a revolving line of credit with Blackland under which           






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011