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preceded, the negotiation and consummation of the private annuity
and MMI transactions.
The proximity of certain key events, particularly in
combination with petitioners’ failure to prove the precise date
of some of the events, is also telling. Petitioners did not
introduce evidence to prove the exact date when the foreign
trusts acquired Clend. Petitioners would have us believe that,
sometime before November 8, 1996, the trusts had acquired Clend,
had elected Mr. Maycock a director, and had authorized Mr.
Maycock to execute the stock purchase agreements dated November
8, 1996, on behalf of Clend. As of November 8, 1996, however,
Clend had not yet held its first directors’ or shareholders’
meetings (the first meeting of directors was not held until
November 22, 1996), it had no director who was authorized to act
on its behalf in executing the stock purchase agreements, and it
had no assets with which to fund the purchase of the HouTex
shares. Clend’s shareholders, the foreign trusts, had not yet
been funded and would not be funded until Mr. Taub’s checks were
deposited and credited to trust accounts on or about January 23,
1997.34 The true chronology, incomplete though it is, suggests
that documents were executed to create the misleading impression
that the foreign entities were formed and functioning before the
34Until the checks were deposited and cashed, Mr. Taub could
have stopped payment on the checks, thereby preventing the checks
from being cashed and used to fund the trusts.
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