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Not Reported in S.E.2d Circuit Court of
Virginia, Warren County. FRONT ROYAL AND
RIVERTON IMPROVEMENT COMPANY, by it’s [sic] Special
Receiver, Ron Lewis Napier, Petitioner, v. ALL SHAREHOLDERS OF, CREDITORS OF,
AND OTHERS CLAIMING ANY INTEREST IN the FRONT ROYAL AND RIVERTON IMPROVEMENT
COMPANY, et al., Defendants. No. 92-235. March 03, 1995. Findings of Fact and Conclusion of Law JUDGE: WETSEL, Jr., Judge: [*1] This case came before the Court on February 22,
1995, for trial to determine the nature, extent, and proper distribution of the
assets of the Front Royal and Riverton Improvement Company under a receivership
created by this Court in 1894. Ron L. Napier, Esquire, the Receiver, appeared;
Stuart D. Gibson, Esq., appeared for the Internal Revenue Service; E. Suzanne
Darling, Senior Assistant Attorney General, appeared for the Commonwealth of
Virginia; Alfred L. White, Jr., Esquire, the Guardian ad litem appeared; and
Leroy W. Corron, Esquire, appeared on behalf of one shareholder. All exhibits
filed prior to trial were admitted into evidence. Evidence was received and
argued by counsel. Upon consideration whereof, the Court has made the following
decision. I. Findings of Fact. The following facts are found by the greater weight of the
evidence: 1. All parties having an interest in the subject property are
before the court, or having been duly served with process and notice of these
proceeding, have made no appearance herein. 2. As of August 31, 1994, the petitioner’s assets in the
control of the Special Receiver consisted of bank accounts with total balances
of $120,725.12. These represent the only remaining assets of the petitioner.
(Petition, ¶ 5; Letter from Special Receiver dated September 20,
1994). The Petitioner has no interest in any real or tangible personal property
in Warren County or elsewhere. 3. Petitioner Front Royal and Riverton Improvement Company
(“FRRIC”) was incorporated in 1890, under the laws of the
Commonwealth of Virginia. (Petition, ¶ 3) Thereafter, the corporation
purchased real estate, which it financed, and sold shares of stock, most of the
shares of which were also sold on an installment basis. See Corporate Minute
Book, page 2. The corporate plan of selling lots and stock to finance the
operations of the corporation failed to produce enough income to meet the
financial obligations of the corporation as they became due. 4. In 1894, a creditor’s suit was filed in this court
styled, H.L. Cook, Trustee v. Front Royal and Riverton Improvement Company, et
al., Warren Chancery No. H86-004940, which precipitated the receivership now in
question. 5. The February 16, 1895, Report of W.A. Trout, Commissioner in
Chancery, reports FRRIC debts of $77,804.22 and assets of $199,012.66, of which
only $593.09 was cash. The commissioner commented that the “value of
the above items [comprising most of the property] are uncertain & no
estimate can be put upon them …’ yet he valued these assets
at $167,374.57. H.L. Cook, Trustee, supra. 6. From the inception of this receivership in 1894, the various
court-appointed receivers slowly, perhaps glacially, liquidated the FRRIC
property, consisting primarily of parcels of real estate located in and around
Front Royal, Virginia. 7. The Accounting of H.L. Downing, Receiver, for the period from
April 29, 1893 through October 20, 1909 (why 1893 not clear), reports that the
Riverton Receiver then had on hand $40,149.49, and by this time apparently all
the FRRIC creditors had been paid or their claims settled. [*2] 8. Although orders of publication were published in
the creditor’s suit of H.L. Cook, Trustee, supra, at various times
during the last one-hundred years, no share holders ever came forward until the
filing of this suit to claim any interest in the assets of FRRIC. 9. The corporate stock register has been lost, and the special
receiver reported that he had no records from which he could identify the
stockholders of the corporation. The FRRIC corporate charter authorized up to
50,000 shares of $10.00 par common stock. Minute Book page 2. The June 8, 1892,
minutes of the meeting of the stockholders report that 24,848 shares were
represented at the meeting. Minute Book, page 149. The minutes of the
stockholders’ meeting at page 187 of the Minute Book reports that
15,563 shares were necessary for a quorum, and there is no quorum requirement
set by the corporate charter or bylaws. Pollard’s Code of Virginia of
1904 § 1105e(17) provides that “a majority in interest of the
shares having voting power, represented either in person or by proxy at any
meeting, shall constitute a quorum.” This as far back as the resources
of this Court permitted investigation. However, given a maximum authorized
number of shares of 50,000 and a quorum of a majority, it appears that there
were approximately 31,125 shares outstanding when the corporation when [sic]
into receivership and which stockholders would potentially have an interest in
the assets of the corporation. This number of shares indicates that the
ownership was highly diluted, which may account for the otherwise inexplicable
lack of shareholder interest. 10. One shareholder, who held ten shares filed an answer in this
case, Estate of W.A. Corron. This is .0003 of all the 31,125 shares
outstanding. 11. Other than the Internal Revenue Service, the petitioner has no
known creditors. (Petition, ¶ 9; Claim of Internal Revenue Service) 12. Until March 1994, neither the Special Receiver nor any of his
predecessors had ever filed a federal income tax return for, or paid any
federal income taxes on behalf of, the petitioner. (Petition, ¶ 7) 13. The reasons advanced by the Special Receiver (and his
predecessors) for not filing federal income tax returns and paying federal
income taxes claimed to be due was that, “the income generated by the
special receivership was not subject to state or federal income taxation
because the receivership was created before the inception of federal income
taxation and because, as such, neither the state or federal (sic) had the power
or authority to tax the assets held by this Court … ,”
(Petition, ¶ 6) and, since the assets were under the control of the
Court no income taxes were due. 14. As of September 27, 1994, the petitioner was indebted to the
United States of America for federal income taxes, penalties and interest for
the years 1942 through 1992. 15. Ron Lewis Napier was appointed FRRIC Special Receiver Order of
this Court on October 23, 1986. See Plaintiff’s Exhibit 1. [*3] 16. Ron Lewis Napier qualified as said Special
Receiver on November 19, 1986. See Plaintiff’s Exhibit 2. 17. Ron Lewis Napier’s predecessor as Special Receiver
was John F. Ewell. John F. Ewell resigned as Special Receiver upon his
appointment as General District Court Judge. From the time he qualified as
Special Receiver until the fall of 1989, Ron Lewis Napier sought with no
success to obtain the records of FRRIC in possession of John F. Ewell.
Ultimately, Ron Lewis Napier obtained the records sought by agreeing to prepare
John F. Ewell’s final accounting. This was finalized on November 28,
1989, more than three years after Ron Lewis Napier qualified. See
Plaintiff’s Exhibits 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14 and 15. 18. Ron Lewis Napier diligently sought to ascertain the tax filing
status of FRRIC throughout his tenure as Special Receiver. His inquiries began
even before he received the records of FRRIC. See Plaintiff’s Exhibit
9. Upon receiving the records of FRRIC, he wrote the Internal Revenue Service
(IRS) on November 27, 1989, to ascertain the tax filing status of FRRIC. See
Plaintiff’s Exhibit 13. The IRS did not respond to that letter. He
again wrote the IRS on February 22, 1991. See Plaintiff’s Exhibit 16.
The only reply from the IRS was the letter dated March 18, 1991, from John C.
Brennan, a copy of which is attached to Plaintiff’s Exhibit 17. Ron
Lewis Napier again wrote the IRS on April 30, 1991, asking that an agent
contact him. See Plaintiff’s Exhibit 17. The IRS never responded to
that letter, nor did any IRS agent ever contact Ron Lewis Napier until after
the instant suit was filed. 19. On November 30, 1992, Ron Lewis Napier filed the pending
Petition which joined the IRS and the Commonwealth of Virginia as parties. By
letter dated February 3, 1993, the U.S. Department of Justice reported to Ron
Lewis Napier that the IRS claimed no tax due. See Plaintiff’s Exhibit
18. Accompanying that letter was a Decree of Dismissal of the United States of
America as Party Defendant. See Plaintiff’s Exhibit 19. By letter
dated March 2, 1993, Ron Lewis Napier again inquired of the U.S. Department of
Justice if it really wanted to be dismissed from the case. See
Plaintiff’s Exhibit 20. By letter dated March 4, 1993, the U.S.
Department of Justice referred the Special Receiver’s inquiries to the
IRS. See Plaintiff’s Exhibits 21 and 22. 20. In response to the Order of Publication, Ron Lewis Napier
received two inquiries. One was from W. LeRoy Corron who claimed possession of
two certificates for a total of eleven shares off FRRIC. See
Plaintiff’s Exhibit 23. He subsequently filed a responsive pleading.
The other inquiry was from Tim Parker. He claimed to have purchased a
certificate for ten shares of FRRIC at an estate sale. Ron Lewis Napier
suggested to him to consult with his own counsel or at the least to file a
responsive pleading pro se. No responsive pleading was filed on his behalf
although an attorney did contact Ron Lewis Napier on his behalf inquiring what
the case concerned. [*4] 21. The only tax returns filed by FRRIC covered the
period January 1, 1993 through December 31, 1994. 22. Until it was named as a defendant in this suit, the Internal
Revenue Service never made demand upon or attempted to collect from petitioner
any federal income tax. As noted, however, the special receiver did file a tax
return for the year 1993, and paid the $200.15 tax liability reported. 23. The IRS has notified Ron Lewis Napier that it will seek no
personal liability against him or his predecessors. 24. The Commonwealth of Virginia has elected not to pursue a claim
for state income taxes in this case. II. Conclusions of Law. 1. For each of the calendar years 1954 through 1992, 26 U.S.C.
§ 11 imposed a tax and, for some years, a surtax, “on the
taxable income of every corporation,” at rates described in that
section. The pertinent regulation interpreting § 11, 26 C.F.R.
§ 1.11-1(a), provides, Every corporation, foreign or domestic, is liable to the tax
imposed under section 11 except (1) corporations specifically excepted under
such section from such tax; (2) corporations expressly exempt from all taxation
under subtitle A of the Code (see section 501); and (3) corporations subject to
tax under section 511(a). 2. The Internal Revenue Codes of 1954 and 1986, which generally
govern federal taxation for the calendar years 1954 through 1992, contain no
exception or exemption from income taxation pertaining to corporations which
were either incorporated or placed into receivership before the ratification of
the Sixteenth Amendment to the Constitution. 3. For each of the calendar year 1954 through 1992, 26 U.S.C.
§ 6012(a)(2) provided that income tax returns must be filed by,
“Every corporation subject to taxation under subtitle A.” For
each of the calendar years 1954 through 1992, 26 U.S.C. § 6012(b)(3)
provided, in pertinent part, In a case where a receiver, trustee in [a case under the United
States Bankruptcy Code] or assignee, by order of a court of competent
jurisdiction, by operation of law or otherwise, has possession of or holds
title to all or substantially all the property or business of a corporation,
whether or not such business or corporation is being operated, such receiver,
trustee, or assignee shall make the return of income for such corporation in
the same manner and form as corporations are required to make such returns. For each of the years 1954 through 1992 for which it received
taxable income, the petitioner was liable for federal income tax and, for the
applicable years, a surtax at the rates described in § 11, and the
special receiver was responsible for filing the appropriate federal income tax
return reporting that income, and paying that tax. 5. For the calendar years 1954 through 1992, a corporation
required to file a federal income tax return was generally required to file
that return on or before March 15 of the year following the end of the calendar
year. 26 U.S.C. § 6072(b). For the calendar years 1954 through 1992, a
taxpayer who did not pay a tax liability when due was required to pay interest
at the underpayment rate established from time to time in § 6621 of
the Internal Revenue Code, from the due date, “to the date
paid.” 26 U.S.C. § 6601(a). [*5] 6. For each of the calendar years 1954 through
1992, a taxpayer who does not file a required federal tax return when it was
due is subject to a penalty of 5% of the amount of such tax for each month or
fraction of a month for which the return is late, up to a maximum of 25%,
“unless it is shown that such failure is due to reasonable cause and
not due to willful neglect.” 26 U.S.C. § 6651(a)(1). 7. For each of the calendar years 1990 through 1992, a taxpayer
who understates due to “negligence or intentional disregard of rules
or regulations,” a tax liability required to be reported on a return,
is subject to a penalty of 20% of the amount of the understatement. For
purposes of this penalty, “the term ‘negligence’
includes any failure to make a reasonable attempt to comply with the provisions
of [Title 26], and the term ‘disregard’ includes any
careless, reckless, or intentional disregard.” 26 U.S.C.
§§ 6662(a), (b) and (c). 8. For each of the calendar years 1982 through 1989, a taxpayer
who understates due to “negligence or intentional disregard of rules
or regulations,” a tax liability required to be reported on a return,
is subject to a penalty of 5% of the amount of the tax reported on the return,
plus 50% of the interest attributable to the negligence. 26 U.S.C. §
6653(a) (repealed for taxable years beginning after December 31, 1989). 9. For each of the calendar years 1954 through 1981, a taxpayer
who understates due to “negligence or intentional disregard of rules
or regulations,” a tax liability required to be reported on a return,
is subject to a penalty of 5% of the amount of the tax reported on the return.
26 U.S.C. § 6653(a) (before amendment for taxable years beginning
after December 31, 1981). 10. For the calendar years 1950 through 1953, § 13(b) of
the Internal Revenue Code of 1939 (26 U.S.C.1952 ed.), as amended by §
121(a) of the Revenue Act of 1950, Ch. 994 (64 Stat. 906), and §
121(a) of the Revenue Act of 1951, Ch. 521 (65 Stat. 452), provided in
pertinent part that, in the case of calendar years 1950 through 1954, “there
shall be levied, collected, and paid for such taxable year upon the normal-tax
net income of every corporation … a tax….” 11. For the calendar year 1942, § 14(a) of the Internal
Revenue Code of 1939 (26 U.S.C.1952 ed.), as amended by § 201 of the
Revenue Act of 1939, Ch. 247 (53 Stat. 862), provided in pertinent part,
“There shall be levied, collected, and paid for each taxable year upon
the normal-tax net income of [corporations with normal-tax net income of not more
than $25,000] (in lieu of the tax imposed by section 13) the tax hereinafter in
this section specified.” 12. For the calendar year 1942, § 15(b) of the Internal
Revenue Code of 1939 (26 U.S.C.1952 ed.), as enacted in § 201 of the
Revenue Act of 1940, Ch. 419 (54 Stat. 516), and amended by § 105(b)
of the Revenue Act of 1942, Ch. 619 (56 Stat. 798), provided in pertinent part,
“There shall be levied, collected, and paid for each taxable year upon
the corporation surtax net income of every corporation … a surtax as
follows: … (1) Upon corporation surtax net incomes not over $25,000,
10 per centum of the amount thereof.” [*6] 13. The Internal Revenue Code of 1939 (as amended
from time to time), which generally governed federal taxation for the calendar
years 1939 through 1953, contained no exception or exemption from income
taxation pertaining to corporations which were either incorporated or placed
into receivership before the ratification of the Sixteenth Amendment to the
Constitution. 14. For each of the calendar years 1942 and 1950 through 1953,
Section 52(a) of the Internal Revenue Code of 1939 (26 U.S.C.1952 ed.),
provided in pertinent part, Every corporation subject to taxation under this chapter shall
make a return, stating specifically the items of its gross income and the
deductions and credits allowed by this chapter and such other information for
the purpose of carrying out the provisions of this chapter as the Commissioner
with the approval of the Secretary may by regulations prescribe…. In
cases where receivers, trustees in bankruptcy, or assignees are operating the
property of business of corporations, such receivers, trustees, or assignees
shall make returns for such corporations in the same manner and form as
corporations are required to make returns. Any tax due on the basis of such
returns made by receivers, trustee, or assignees shall be collected in the same
manner as if collected from the corporations of whose business or property they
have custody and control. The courts that have interpreted this provision have held that
§ 52 requires receivers, trustees and assignees involved in
liquidating the property of a business to file federal income tax returns, and
pay tax on, income earned in the liquidation process. United States v.
Metcalf [42-2 USTC ¶ 9774], 131 F.2d 677 (9th Cir.1942), cert.
denied, 318 U.S. 769 (1943); Louisville Property Co. v. Commissioner of
Internal Revenue [44-1 USTC ¶ 9182], 140 F.2d 547 (6th Cir.),
cert. denied, 322 U.S. 755 (1944); Pinkerton v. United States [48-2 USTC
¶ 9410], 170 F.2d 846 (7th Cir.1948); United States v. Sampsell [59-1 USTC
¶ 9190], 266 F.2d 631 (9th Cir.1959). 15. For each of the years 1942 and 1950 through 1953, the petitioner
was liable for federal income tax and surtax as provided in
§§ 13, 14 and 15 of the Internal Revenue Code of 1939, and
the special receiver was responsible for filing the appropriate federal income
tax return reporting that income, and paying that tax and surtax. 16. For the calendar years 1942 and 1950 through 1953, a taxpayer
who did not pay a tax liability when due was required to pay interest at 6% per
annum. Internal Revenue Code of 1939, § 3794. 17. For each of the calendar years 1942 and 1950 through 1953, a
taxpayer who did not file a required federal tax return when it was due is
subject to a penalty of 5% of the amount of such tax for each month or fraction
of a month for which the return is late, up to a maximum of 25%, “unless
it is shown that such failure is due to reasonable cause and not due to willful
neglect.” Internal Revenue Code of 1939, § 291 (26 U.S.C.1952
ed.). [*7] 18. For each of the calendar years 1942 and 1950
through 1953, if any part of a tax deficiency is due to “negligence,
or intentional disregard of rules or regulations but without intent to
defraud,” an addition to the tax of 5% of the amount of the total
amount of the deficiency, “shall be assessed.” Internal
Revenue Code of 1939, § 293. 19. The United States has a valid and enforceable claim against
the petitioner for federal income taxes and interest, due and owing for the
years 1942, 1950-1958, 1962, and 1964 through 1992. 20. When this receivership was ordered by the Circuit Court of
Warren County in 1894, the ill fated Czar Nicholas II ascended to the throne of
imperial Russia, and Nikita Khrushchev, who would preside over the regime which
overthrew that Czar and whose bellows would rock the government whose tax
agency now seeks to grasp the funds of the receivership, was born. About the
time of the First World War, the receivership appears to have assumed a life of
its own, and, like Dickens’ Jarndyce
v. Jarndyce, the Riverton Receivership passed from
generation to generation. Since the receivership’s inception, this
country has been engaged in numerous wars, a great depression, and experienced
immeasurable social and economic changes. Receivers came and went, many of whom
were prominent and respected members of the local bar, and each succeeding
receiver plodded stolidly along in the footsteps of his predecessor. In 1913,
the federal income tax was enacted, and thereafter each successive receiver, except
for the last one, unwittingly failed to pay federal income taxes. The IRS,
which was not even embryonic in 1894, now is in the full strength of its
adulthood, and armed with the rectitude of omniscient hindsight and an
insatiable appetite, now wishes to elevate the receivers’ nonpayment
of the federal income tax to culpable maladministration, so that all of the
funds of the receivership will be paid to the internal revenue service. Nineteen forty-two, the first year that the IRS claims that taxes
are due in this case, saw the apogee of the Axis advance in World War II, and
none of the lawyers or the judge in this case had yet been born. The theory of
the IRS is that sometime between 1913 and 1942, a reasonably prudent receiver,
under the circumstances of this case would have known, or in the exercise of
reasonable diligence should have known, that income taxes were due the IRS. The
evidence does not show when this Damascene revelation should have occurred to
the receiver. Even in the last decade of the twentieth century, not all lawyers
are tax lawyers, and the labyrinthine provisions of the internal revenue code
and its attendant regulations have spawned a host of lawyers, accountants, and
other specialists, whose sole vocation is the interpretation and application of
the complexities of the United States Internal Revenue Code. Consonant with
this reality, the United States Department of Justice has a “Tax
Division,” whose expertise was enlisted in this case. [*8] The
facts of this case are unique, and these conclusions are limited solely to this
case. What constitutes reasonable cause for failure to file a tax return has
evolved into an ever stricter standard. For example, in Dayton Bronze
Bearing Co. v. Gilligan [1992 CCH ¶ 2050; 1922 CT ¶
3268], 281 F. 709, 714 (6th Cir.1922), the Federal Sixth Circuit Court of
Appeals stated: Courts are reluctant to construe a statute to impose a penalty,
unless there has been a substantial delinquency. (cites omitted) As a practical
matter where there has been no substantial delinquency, but only a technical
violation of the statute, and where the negligence of the taxpayer [in failing
to file munitions taxes] was not intentional, such cases have been compromised
by the payment of nominal penalties such as $5 by individual and $10 by
corporations. This case is not controlling, but it illustrates the more relaxed
and forgiving standard applied to the negligent failure to pay taxes which
prevailed prior to the Second World War. The standard today is more strict. See
generally 35 Am.Jur.2D Federal Tax Enforcement § 79; and Annotation,
What Amounts to “Reasonable Cause” for failure to file, or
delay in filing, Tax Returns, 3 A.L.R.2d 617 (1949). In this case the former
receivers believed that they did not have to file returns, because the assets
were under the supervision of the Court. An error, which all but the present
receiver perpetuated. Ron Lewis Napier has discharged his duties as Special Receiver of
FRRIC with the prudence and diligence the law required of him. On the unique
facts of this hoary case, it cannot be said that the preceding receivers were
less prudent. Therefore, no penalties are due the IRS on the delinquent taxes. 21. “The stockholders of an insolvent corporation rank
after its general creditors in the distribution of its assets through a
receivership.” 66 Am.Jur.2D Receivers § 264. Persons within a
class are to be treated alike, so the inquiry in this case is what interest did
the stockholders have when their equities attached in this case, which was in
1894. The extent to which interest may be paid on the claim of a creditor
varies according to the situation. See 66 Am.Jur.2D Receivers
§§ 271 and 272. In this case, the record is now faded in time
or lost altogether. The stockholders could have filed an action long ago when
memories and records were fresh but they did not do so, so the court will order
that the shares which they hold and present to the receiver will be redeemed at
their par. value without interest. The only known shares are the ten held by
the W.A. Corron Estate. The marked lack of shareholder interest in both this
suit, and the many others which have been filed over the decades involving the
receiver, is probably due to the highly diluted nature of the ownership of the
stock. 22. Since the advent of the modern bankruptcy act, receivers like
those in this case, are rare legal entities, which, based on the record of this
case, is fortunate. Not surprisingly, the latest Virginia authority cited by
the Commonwealth on the duties of a receiver dates from 1942. As a trustee, the
receiver must act “with the same prudence and diligence that a
reasonably prudent man uses in the exercise of his own affairs.” Royall
v. Peters, 180 Va. 178, 189, 21 S.E.2d 782, 787 (1942). A receiver, as
trustee, is “answerable for actual or constructive negligence, or
wilful misconduct.” Davis v. Harman, 62 Va. (21 Gratt.)
194, 201 (1871). Where the negligence or misconduct of the receiver results in
a loss to the fund in his trust, the receiver, rather than the owner of the
fund, may be held accountable for such loss. Carr’s Administrator
v. Morris, 85 Va. 21, 25-26, 6 S.E. 613, 614 (1888). [*(] 23. By as early as 1909, the Receiver had
$40,149.49 cash on hand, and was possession of real estate which it was
selling. The creditors had been satisfied, and the stockholders could, and
should, have petitioned the court to liquidate the remaining property and
distribute the cash of the receivership to them according to their interests.
This right of action of the stockholders accrued before the First World War and
before the enactment of the Federal Income Tax or the Virginia Uniform
Disposition of Unclaimed Property Act. Laches is the neglect or omission to
assert a right for an unreasonable and unexplained length of time, under
circumstances that are prejudicial to an adverse party. McNeir v. McNeir, 178 Va.
285, 16 S.E.2d 632 (1941); Finkel Outdoor Products, Inc. v. Bell, 205 Va.
927, 140 S.E.2d 695 (1965). One important factor in determining whether or not
the doctrine of laches will operate as a bar to an action is the statute of
limitation, because it is well established that “equity follows the
law” as to applicable periods of limitations. U.S. v. Lomas Mortg.,
USA Inc., 742 F.Supp. 936, 939 (W.D.Va.1990). Virginia Code §
8.01-245 sets a ten year statute of limitations against any claim by the
shareholders against the fiduciary. The stockholders are barred by laches from
now asserting any claim against the receiver, which accrued more than ten years
ago, so they could only go back under any theory to 1985. 24. The Commonwealth asserts its claim for the stockholders under
the Uniform Disposition of Unclaimed Property Act, Virginia Code
§§ 55.210.1 et seq., which was passed in 1960. However, only
one stockholder has appeared, and his interests have been determined in this
case, and he has not been damaged by any act of the receiver. The evidence
indicates this is the only known stockholder. When parties who have a potential
interest in property are made parties to a suit but file no response, they are
nonetheless bound by the result. The Commonwealth may not assert problematical
claims on behalf on [sic] theoretical stockholders against the Receiver,
because there is no proof that such stockholders exist, or, if they did, that
they have a viable claim against the receiver. III. Decision. For the foregoing reasons, a final order will be prepared by the
Receiver, by which, it is ADJUDGED AND ORDERED that 1. The Federal income tax due with interest, but without
penalties, will be paid to the Internal Revenue Service. 2. The shares held by the Estate of W.A. Corron will be redeemed
based on a payment of .0003 of the balance of the estate held by the Receiver
after payment of the federal taxes and costs of the receiver. 3. The Guardian ad litem fees as submitted are awarded, but there
may be some additional work incident to the entry of the final decree. Therefore,
the Guardian is directed to file a final application for award of fees, when
the final order is tendered to the Court. A blank will be left in the order for
the award of fees and costs. [*10] 4. The remaining funds held by the receiver, less
the costs of this suit and the commissioner of accounts fees, and any held by
the Clerk of this Court in the Case of H.L. Cook, Trustee v. Front Royal and
Riverton Improvement Company, et al., Warren Chancery File No. H86-004940,
shall be paid to the Treasurer of Virginia pursuant to the Virginia Uniform
Disposition of Unclaimed Property Act, Va.Code Ann. §§
55-210.1 through 55-210.30. 5. The Special Receiver, Ron L. Napier, Esquire, shall state and
settle his accounts before the Commissioner of Accounts in the manner
prescribed by law. 6. The final decree shall also provide for the ending of H.L.
Cook, Trustee v. Front Royal and Riverton Improvement Company, Warren Chancery
H86-004940. The Clerk is directed to send a copy of these Findings and Conclusions
to counsel of record, who shall file such objections hereto as deemed advisable
within ten days of their receipt of a copy hereof, and to post a copy on the
front of the courthouse. The Receiver is directed to prepare a final decree, to
circulate it among counsel for endorsement, and to then sent it to the Court
for entry. The Final Decree will set forth Findings of Fact
“1” and “2” and will incorporate the other
findings of fact and conclusion’s of law by reference, and provide for
recording a copy of the final decree in the current deed book, indexing it in
the Grantor index in the name of the FRONT ROYAL AND RIVERTON IMPROVEMENT
COMPANY. |