- 5 -
reached a high of $1,779,169 in 1991. In 1993, Richard Rowe,
Jr., and Joseph Tidwell made a transfer of $25,000 and $18,000,
respectively, but also demanded repayment of $110,000 and
$26,000, respectively, for education expenses. In 1998, Donna
Rowe demanded repayment of $180,000 for boat repairs. Mr. Rowe,
in 1994 and 1995, demanded repayment of $15,000 and $650,000,
respectively, to pay his taxes and purchase a home. Mr. Rowe
also demanded repayment of $84,948, $80,000, $25,000, and $70,221
in 1997, 1998, 1999, and 2000, respectively, to pay litigation,
boat repair, and tax expenses. The Rowes, in 1997 and 1998, made
additional transfers to petitioner of $500,000 and $300,000,
respectively. The balance of “notes payable - stockholders” on
December 31, 2000, totaled $1,166,912.2
In 1993, Mr. Holmes determined that a promissory note should
be executed for a portion of the previously undocumented
transfers from the Rowes. Petitioner, on December 31, 1993,
executed a promissory note (1993 note) with Donna Rowe for
$201,400 (i.e., her outstanding balance) of the $1.5 million
total outstanding balance of the transfers. The 1993 note was
payable on demand, was freely transferable, had no maturity date
or payment schedule, and had a stated interest rate of 10
2 This amount also reflects a net decrease of $214,088 that
was reported in 1992. The record, however, is not clear as to
how many transfers and/or repayments were made during that year
or which stockholders were involved in the 1992 transactions.
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