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Mr. Gleason purchased 35 percent of Target, a metal-stamping
business, for an initial investment of $35,000. Then, in 1992,
Mr. Gleason invested $50,000 in each of two related S
corporations, Alofs and Excellence Manufacturing, Inc.
(Excellence), in exchange for interests of 20 percent. Alofs,
like Target, was a metal-stamping business, and Excellence was a
seat assembly business. All three companies were engaged in
supplying components to major automobile manufacturers.
Mr. Gleason served as president of each of these corporations and
dealt with operational aspects. A common group of investors
and/or officers was involved with each of the three companies (as
well as with other entities not directly relevant to the instant
litigation), operating to an extent not clearly explained by the
record under the name M/IC Partnership.
LBO Transaction and Aftermath
During late 1994, some shareholders in the companies became
interested in restructuring or monetizing their interests to take
advantage of anticipated consolidation in the automotive supply
industry. Ernst & Young LLP (E&Y) was engaged to advise on
2(...continued)
extent, if any, of her formal interest in the entities. She is a
party to this action primarily because she filed joint returns
with Mr. Gleason. While we have framed the issues in terms that
would incorporate any potential joint ownership on the part of
Mrs. Gleason, the underlying background and events will, for
simplicity, be described largely from the perspective of
Mr. Gleason’s activities.
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