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with anyone who had an equity interest or financial interest in
PK Ventures.
PK Ventures’ general ledger for 1992 indicated that, during
1992, PK Ventures paid Rose $500,000 for 1986 and $246,948 for
1987. As of December 31, 1992, the “Deferred Compensation”
account included in PK Ventures’ general ledger showed a current
balance of $3,713,052. At the advice of the auditors of PKV&S’s
consolidated financial statements, this balance was “reversed”
off of PK Ventures’ general ledger. Consequently, there was no
liability for deferred compensation reported on PKV&S’s audited
consolidated financial statements for the year ended December 31,
1992, or on PKV&S’s audited consolidated financial statements for
the year ended December 31, 1993. Moreover, there was no
liability for deferred compensation reported on the Schedules L
attached to PKV&S’s consolidated income tax returns for 1992 and
1993.
PK Ventures’ general ledger for 1992 also indicated that,
during 1992, PK Ventures paid Rose $900,000 for his services to
it and its subsidiaries. Of this $900,000, $32,500 was
attributable to “MGT SAL TPTC” and $32,500 was attributable to
“MGT SAL TBPC”.
PK Ventures’ general ledger for 1993 indicated that, during
1993, PK Ventures paid Rose compensation totaling $2,031,993.
The general ledger did not clearly indicate what portion of this
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