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because Mr. Handel’s clients consisted of petitioners and their
corporations. Our conclusion is also supported by the October
25, 1994, letter written by MDFC to respondent’s agents that
contains the statement that the judgment against AIC and
petitioners was satisfied on September 6, 1989. We believe that
the essence of these letters is that the financial institutions
regarded petitioners as the officers and shareholders of their
wholly owned corporations.
We found Mr. Forman’s (the acting president of Southern
Pacific) testimony to be both credible and consistent with
California law and the record. He characterized Southern
Pacific’s rights or interest in the vending machines as those of
the holder of a security interest that could develop into a
possessory or other property interest upon default on the lease
payments. See generally Cal. Com. Code sec. 1201(37)(a). On the
other hand, Mr. Smith (a senior commercial lending officer for
NBSC) testified that NBSC became the owner of certain leases that
were assigned to it through transactions with petitioners’
corporations. Mr. Smith misconstrued the effect and character of
the transactions between NBSC and petitioners’ corporation. NBSC
possessed nothing more than any other security holder involved as
a lender with petitioners’ corporations. The assignment of the
leases was to provide a source of repayment of outstanding loans.
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