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distributions of income from the earnings of the assets as
distributed by the action of The Directors and nothing more.”
Also at the August 20 meeting, Mr. Richardson was appointed
a director of HGAMC and was given the title of Executive
Director. Mrs. Richardson was appointed as Executive Secretary
of HGAMC. HGAMC contracted for the services of petitioners in
those executive roles, in exchange for living accommodations,
expenses incident to company business (e.g., transportation,
office, entertainment, and meeting expenses), life and medical
insurance, and consultant fees.
By a trust instrument likewise dated August 20, 1996, HGAMC
created HGRCT. Petitioners executed the document both as
directors of HGAMC and as trustees of HGRCT. Petitioners did not
obtain section 501(c)(3) status for HGRCT.
On August 23, 1996, Mr. Quay submitted, and petitioners in
their capacities as directors of HGAMC accepted, his resignation
as a director of HGAMC. On August 29, 1996, petitioners
conducted board meetings for both HGAMC and HGRCT. At the HGAMC
meeting, petitioners’ four children were named as successor
directors, in the order listed, and as successors in equal shares
to petitioners’ beneficial interests. At the HGRCT meeting,
HGRCT received 10 units of beneficial interest in HGAMC and in
exchange issued to HGAMC all units of beneficial interest; i.e.,
100, in HGRCT. At a second meeting of the HGRCT on September 1,
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Last modified: May 25, 2011