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Furthermore, it is noteworthy that such action would likely
revest in decedent himself, as the 99-percent limited partner,
the majority of the contributed property.
As regards property transferred to Stranco and income
therefrom, decedent held the right, in conjunction with one or
more other Stranco directors, to declare dividends. The
corporation’s bylaws authorize the board of directors to declare
dividends from the entity. For the board to take such action, a
majority vote of the directors at a meeting with a quorum present
is sufficient. Under the bylaws, a majority of the directors
then serving constitutes a quorum. Because Stranco had five
directors, a quorum would consist of three, so two directors
(e.g., decedent through Mr. Gulig and one other) could
potentially act together to declare a dividend. The Stranco
shareholders agreement further provided that each of the initial
five directors would be reelected annually, thus effectively
ensuring decedent’s position on the board.
In response to various of the above concepts pertaining to
joint action, particularly by stockowners, the estate suggests:
“If the mere fact that a shareholder could band together with all
of the other shareholders of a corporation and such banding
together would be sufficient to cause inclusion under Section
2036, then it would have been impossible for the United States
Supreme Court to reach the decision that it did in Byrum.” The
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