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obligation to pay Aker’s rent obligations. Indeed, it was, as
the arbitrators concluded, Aker’s responsibility to pay NPI for
the use of the Lowell plant, which Glendon ultimately paid by
virtue of the final arbitration decision. This, of course, is in
accord with what the brothers agreed in the unbundling agreement.
Given that these funds were transferred to NPI, which the Bensons
used for their personal benefit, see infra, we find and hold that
the Bensons received constructive dividends in the amounts of the
excess rents that ERG paid.
9. Director’s Fees
During the years at issue, ERG paid moneys to Esther,
Elizabeth, Mark, Brad, and Eric as purported director’s fees.
Additionally, in 1994, Burton altered the date on a $12,000 check
previously issued to his mother and negotiated it shortly after
her death. Burton testified that this check also represented
director’s fees paid to his mother. Respondent argues that all
these payments represent constructive dividends to Burton. We
agree with respondent.
At trial, Burton generally testified that his family members
were directors of ERG, that ERG held meetings from time to time,
and that the purported directors performed services for ERG.
However, he did not testify what services the purported directors
59(...continued)
will resolve the difference in their Rule 155 computation.
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