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A: I vaguely recall having some discussions like
increasing the rents, and along those lines, yes.
Q: And in those discussions, do you recall discussing
performing services as another way that ERG’s profits
might flow to NPI?
A: Probably.
Q: And if those profits flowed from ERG to NPI, then
would ERG appear less profitable?
A: Yes.
Q: At least on paper?
A: Yes.
Q: Do you recall a discussion or discussions with
Admiral Benson in which Admiral Benson expressed a
desire to keep the profits of ERG for any given year,
to a level of about $75,000 – excuse me, did I say
profits? I meant taxable income.
A: We have [sic] a conversation along those lines.
Similarly, on or about April 13, 1993, Burton sent Bradac a
memorandum which states in pertinent part:
ERG 1) ERG had an estimated profit of $757,000 for yr-
end 1992.
2) Assume ERG pay [sic] royalties to NPI of $750K
for this period.
3) Then ERG has minimal to no tax for Fed & state
in 92.
NPI 1) NPI has a est. profit of $750K from ERG plus
$68K self made profit equals $818K for 1992.
2) Assume $818K flows to BOB somehow royalty,
profit, salary, this yet to be determined.
3) Then NPI has no Fed tax but has CA State
of 2 1/2% of profit * * *
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