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During 1993, Rose made cash transfers to PK Ventures and its
subsidiaries totaling $2,863,500. Note 3 to PKV&S’s audited
consolidated financial statements for the year ended December 31,
1993, stated the following with respect to these transfers:
Notes payable to shareholder represent cash advances
contributed to the Company by the major shareholder for
operations. The notes bear interest at 12% and are due
on demand. The shareholder advanced $2,863,500 and
$990,000 to the Company during 1993 and 1992,
respectively.
Interest expense on notes payable to shareholder was
$292,350 and $19,313 during 1993 and 1992,
respectively.
Rose’s Wages for 1986 Through 1993
The following table breaks down the percentage of time that
Rose devoted to his duties for Printon Kane and/or the Printon
Kane Group, PK Ventures and its subsidiaries, PKVI LP, and Zephyr
during 1986 through 1993:
Printon Kane/ PK Ventures and
Year Printon Kane Group Subsidiaries PKVI LP Zephyr
1986 40% 50% 10% –-
1987 20 40 10 30%
1988 15 40 15 30
1989 15 50 15 20
1990 –- 78 15 7
1991 –- 85 15 –-
1992 –- 85 15 –-
1993 –- 85 15 –-
During these years, Rose routinely worked long hours and rarely
took vacations.
PK Ventures reported the following amounts from its
operations on its income tax return for 1986, and PKV&S reported
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