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Defendant Arabian agreed to retain a company created by B.L.
<br />Bobo, called B.L. Bobo Company, a Colorado corporation, for
<br />purposes of managing the coal company, American, for a management
<br />fee of $10,000.00 per month for a period of three (3) years. This
<br />agreement was evidenced by the 1985 10-K Form, the 1986 10-K Form,
<br />and the 1987 10-K Form filed with the Securities and Exchange
<br />Commission. See Exhibits 2, 2A, 3, 3A, 4, and 4A. In addition,
<br />Defendant Arabian's written Notice of Annual Meeting of
<br />Stockholders to be held November 25, 1986 indicates that B.L. Bobo
<br />Company was to be the managing company of the American Shield Coal
<br />Company for a management fee of $10,000.00 per month for a period
<br />of three (3) years. Further that B.L. Bobo Company is wholly owned
<br />by B.L. Bobo and members of his family and Mr. Bobo was not to
<br />receive cash compensation from American for the purpose of his
<br />duties as President of Defendant American. See Exhibits 6 and 6A.
<br />Also on page
<br />Stockholders, the
<br />company, American,
<br />management fee of
<br />Exhibits 7 and 7A.
<br />18 of Defendant Arabian's Annual Report to
<br />Defendant Arabian indicated that the coal
<br />was to be managed by B.L. Bobo Company for a
<br />$10,000.00 per month, plus expenses. See
<br />t~
<br />Additionally, the 1987 Defendant Arabian's Annual Report to
<br />Stockholders indicated that the coal company, American was to be
<br />managed by B.L. Bobo Company for a management fee of $10,000.00
<br />per month, plus expenses incurred during 1986 and 1987. See
<br />Exhibits 8 and 8A.
<br />Plaintiffs contend that expenses in the amount of $48,509.79
<br />were due and owing to B.L. Bobo Company for the years 1986 and
<br />1987. Ms. Nicki Dages, former bookkeeper for B.L. Bobo Company,
<br />George Mendenhall, the C.P.A. for B.L. Bobo Company and Mrs. Bobo,
<br />each testified concerning these expenses incurred and unpaid.
<br />Documentary evidence was introduced, substantiating the expenses,
<br />including the report of the expert, George Mendenhall, and the
<br />worksheets of Nicki Dages for the year 1986, as well as a summary
<br />for 1986 and 1987, also prepared by Nicki Dages. See Exhibits 11,
<br />15, 20 and 26.
<br />On April 2, 1986, the Defendant Arabian on a consistent basis
<br />paid 50 percent of the overhead expenses for the year 1987. Ms.
<br />Dages sent a correspondence to Mr. Sam Parker, the accountant for
<br />Defendant Arabian, requesting reimbursement of $7,427.25, itemizing
<br />the expected expenses for the months of April ar.d May of 1986 and
<br />indicating that if more information was needed to obtain
<br />reimbursement, or, if a different format was desired other than the
<br />50 percent format, to inform her. The Defendant never contested
<br />the manner in which the expenses were allocated by B.L. Bobo
<br />Company. See Exhibit 15; letter dated 4/2/86.
<br />Ms. Dages testified that Defendant Arabian consistently made
<br />the $10,000.00 a month payment by way of check drawn on Arabian
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