Eric B. Benson, et al. - Page 66

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          rent to NPI on behalf of Glendon/Aker.  Burton testified that               
          during the arbitration proceedings, it was ERG’s responsibility             
          to pay Aker’s rent obligation since it was still, at least until            
          a final resolution was achieved, ERG’s research and development             
          division.                                                                   
               The arbitrators in their final decision found that “the rent           
          that should be paid by GMB [Glendon]/Aker to NPI is $2,000 per              
          month from July 1, 1987 to December 31, 1994 and $2,500 per                 
          month” thereafter.  And in fact, Glendon did pay such rent via a            
          credit to the amount the arbitrators decided Burton owed him.               
               Respondent argues that ERG had no duty to pay NPI $31,850,             
          $29,400, $29,400, $31,020, and $41,736 in 1988, 1989, 1990, 1993,           
          and 1994, respectively, for Aker’s use of the Lowell plant and              
          that those payments constituted constructive dividends to the               
          Bensons.59  We agree with respondent that ERG had no contractual            

               58(...continued)                                                       
               I knew that the performance on the [unbundling]                        
               agreement required payment of rent. * * * [But it] also                
               required my brother to advance money to satisfy the                    
               terms of that agreement.  I was not going to pay rent                  
               until my brother satisfied his monetary agreement, or                  
               commitments.                                                           
               59Respondent determined these amounts in the notices of                
          deficiency.  However, in a stipulated exhibit, the parties agreed           
          that ERG paid NPI $31,850, $26,950, $31,850, $33,840, and $38,296           
          during the years at issue, respectively, as rent for the Lowell             
          plant.  But see supra p. 25, table, note 1.  From the evidence              
          and argument presented, we cannot determine why there is a                  
          discrepancy between the amounts that respondent determined and              
          the amounts the parties stipulated.  Thus, we assume the parties            
                                                             (continued...)           





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