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Total Shares Percentage of
Additional Owned After Shares Owned After
Shareholder Shares Acquired Acquisition Acquisition
McCarthy 7 10 .10%
Beason 14 20 .20
Grimmig 1,073 1,229 12.29
Kane 2,802 3,209 32.09
Kane Jr. 48 69 .69
Kirkwood 37 53 .53
Krutoy 1,101 1,261 12.61
Mannello 56 80 .80
Marshall 48 69 .69
Rose 4,000 4,000 40.00
Total 9,186 10,000 100.00
The Purchase of Zephyr
Zephyr, a Florida corporation, operated as an S corporation
during 1987. Zephyr’s primary business was mining, processing,
and selling limestone from a quarry that it owned in Pasco
County, Florida. As of August 19, 1987, Zephyr’s balance sheets
showed that its current liabilities exceeded its current assets
by $6,030,986.
Sometime before August 20, 1987, PK Ventures entered into a
stock purchase agreement with Elli M.A. Mills (Mills) to purchase
all of Zephyr’s issued and outstanding stock. Prior to closing
this agreement, it was decided that, for certain business and tax
reasons, PK Ventures would assign its rights under the stock
purchase agreement to 10 individuals--Beason, Cerosky, Grimmig,
Kane, Kane Jr., Krutoy, Mannello, Marshall, McCarthy, and Rose
(collectively, the Zephyr purchasers)–-9 of whom were
shareholders of PK Ventures (i.e., Cerosky was no longer a
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