- 7 - Beginning in 1987, petitioner became gradually more involved in the business operations and finances of 2618 and the club, principally out of concern that Helmle might not be able to pay legal fees owed to petitioner in excess of $500,000. During 1987, petitioner entered into agreements with Helmle and others, which, in consideration of a management fee, gave petitioner the right “to control and manage the activities of the club CALIGULA XXI”, and placed him “in total control of all financial and managerial decisions at the club”. The agreements also enabled 2618 to redeem the stock of the other 50-percent shareholder (making Helmle the sole shareholder) with the proceeds of a $275,000 bank loan to petitioner that, pursuant to the agreements, was to be repaid (including interest) by means of scheduled monthly payments from 2618 to petitioner. On February 15, 1988, ownership interests in the following tangible and intangible personal property relating to the club were transferred to petitioner in satisfaction of $35,000 in legal fees owed to him: (1) 2618's leasehold interest in the building in which the club operated; (2) furniture, furnishings, fixtures and leasehold improvements in the building; and (3) the right to use the Caligula XXI name. Petitioner then leased such property back to 2618. On March 15, 1988, petitioner agreed to acquire Helmle’s stock in 2618 and, thereby, become the sole shareholder in 2618.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