David Taylor Enterprises, Inc. & Subsidiaries - Page 5

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          Until his death, Mr. Taylor personally negotiated the sales of              
          the classic cars.                                                           
               To command a premium price for the classic cars, a priority            
          for the dealership and Mr. Taylor, the classic cars had to be               
          restored to classic condition, maintained, and driveable at any             
          time by potential customers.  Restoring the cars involved a long            
          process of fundamentally rebuilding the car to near perfection.             
          After the cars were fully restored, the dealership carefully                
          maintained them by setting the cars on jack stands so the tires             
          maintained air pressure, starting the engines every 6 weeks, and            
          changing the oil every 6 months.                                            
               In addition, the dealership kept the classic cars indoors to           
          protect them from inclement weather.  Initially, the classic cars           
          were kept at the dealership or in Mr. Taylor’s garage, and later            
          were moved to a building the dealership bought that was located             
          across the street from its main showroom.  The cars were                    
          eventually moved to three adjacent buildings in Galveston, Texas            
          (the Galveston property)6 that the dealership purchased to                  
          provide the classic cars with a climate-controlled environment              
          and to expose them to the public.7                                          

               6The Galveston property was acquired by David Taylor Realty,           
          Inc., another member of the affiliated group.                               
               7Petitioner decided to operate the Galveston property as a             
          museum and charge admission.  Petitioner named the property the             
          David Taylor Classic Car Museum.  Operating the Galveston                   
                                                             (continued...)           





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Last modified: May 25, 2011