Mediaworks, Inc. - Page 4

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          35.5 to be used for a general business office, staff and client             
          meetings, and corporate entertainment for a purchase price of               
          approximately $67,000".  On or about August 29, 1997, petitioner            
          purchased the sailboat at issue, a 42-foot Centurion yacht                  
          (Centurion), for $155,000.3  Petitioner’s board resolved as to              
          the Centurion that “It is in the best interest of the Corporation           
          to purchase a 1985 Centurion 42 by Wauquiez to be used for a                
          general business office, staff and client meetings, and corporate           
          entertainment for a purchase price of approximately $155,000".              
          At the time of the last resolution, petitioner was headquartered            
          in two or three suites of offices in Burbank, California.  Those            
          suites included at least one production studio and at least eight           
          editing rooms.                                                              
               Before petitioner purchased the Centurion, Roach had done              
          little sailboat racing.  Roach considered the purchase of the               
          Centurion to be an opportunity for him to compete in performance            
          racing.  The Centurion is a very high class, powerful sailboat              
          that was built in 1985 and is considered to be a prestigious and            
          luxurious yacht that is one of the fastest yachts of great                  
          international class.  From an operation point of view, the                  
          Centurion was designed for pure sailing joy and has a helm that             

               3 Petitioner disposed of the Catalina before purchasing the            
          Centurion, and it sold the Beneteau 4 days after it purchased the           
          Centurion.  In addition to these three boats, Roach, either                 
          personally or through petitioner, purchased three other                     
          sailboats.                                                                  





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Last modified: May 25, 2011