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(Bankruptcy Court) to force Management and MLP into bankruptcy
and liquidate each company’s assets. On June 5, 1997, the
Bankruptcy Court entered an order for relief, in effect finding
that Management and MLP were both bankrupt.
In the Management and the MLP bankruptcy cases, the United
States Trustee (U.S. Trustee), in 1997, moved to have the
Bankruptcy Court substantively consolidate all assets and
liabilities of almost all Hoyt organization entities and the many
Hoyt investor partnerships. This consolidation included all the
cattle and sheep partnerships. On November 13, 1998, the
Bankruptcy Court entered its Judgment for Substantive
Consolidation, consolidating all the above mentioned entities for
bankruptcy purposes. The U.S. Trustee then sold off what little
livestock that the Hoyt organization owned and/or managed on
behalf of the cattle and sheep partnerships.
From 1992 through 1998, the IRS at various times issued
standard letters to investor-partners advising them of the IRS’s
position in disputing the claimed tax benefits from the cattle
and sheep partnerships. From 1992 through 1998, Revenue Agent
Norman Johnson and other IRS employees discussed the IRS’s
position with hundreds of investor-partners in the cattle and
sheep partnerships. Many of the discussions addressed the
confusion various partners had regarding certain tax issues as a
result of the conflicting information and tax advice that Jay
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