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in ML Leasing’s portfolio higher than petitioner and Inspiration
had expected. As a result, the chief financial officer for
Merrill Parent instructed Mr. Sands to negotiate an increase in
the purchase price from $126.6 million to $131.4 million. In
accordance with those instructions, Mr. Sands attempted to
negotiate an adjustment to the purchase price. Although his
efforts apparently were not initially well received,17 the
parties ultimately agreed to increase the purchase price by $3
million.
In approximately August or early September 1986, petitioner
provided Inspiration with a draft stock purchase agreement dated
September 11, 1986.18 On September 16, 1986, the executive
committee of Inspiration’s board of directors met to discuss the
acquisition of ML Leasing. After discussion, the executive
committee approved the September 11, 1986, stock purchase
agreement substantially in the form presented. The executive
committee also authorized Inspiration’s management to finalize
the necessary bank financing.
17Mr. Sands was asked by Inspiration’s representatives to
leave the meeting, and, for at least a day after the meeting,
Inspiration refused to return phone calls from either Mr. Sands
or petitioner’s attorneys.
18The Aug. 19, 1986, letter from Inspiration to Mr. Sands
indicates there was a previous version of the Sept. 11, 1986,
draft stock purchase agreement. The record is unclear, however,
as to when the first stock purchase agreement was drafted and
circulated.
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