Jerry S. Payne - Page 13

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          sham, and petitioner received the stock of 2618 Inc not by purchase,        
          but in payment and in satisfaction of the over $500,000 in legal fees       
          owed to him by 2618 Inc and by Helmle.                                      
               During 1986 through 1988, in correspondence to various                 
          individuals, petitioner made statements regarding the value of the          
          stock of 2618 Inc and of the Club.  The following schedule summarizes       
          petitioner's statements:                                                    

          Date      Description                                                       
          09/19/86  Letter to hearing officer for City of Houston in which petitioner 
                    stated that the market value of the Club was between $1 million and
                    $1.5 million.                                                     
          02/11/87  Letter to loan officer for TexGuarantyBk in which petitioner stated
                    that the Club could be sold for $1.5 million.                     
          06/05/87  Letter to district judge for Harris County, Texas, in which petitioner
                    stated that the market value of the Club was between $1 million and
                    $1.5 million.                                                     
          11/17/87  Letter to Kalantzakis in which petitioner stated that a 50-percent
                    stock interest in 2618 Inc had a value of over $700,000 and that an
                    individual had offered to purchase the Club for $1 million.       
          02/29/88  Letter to Helmle in which petitioner stated that an offer had been
                    received to purchase a 50-percent stock interest in 2618 Inc for  
                    $600,000.                                                         

          Relief as Guarantor of $705,000 Debt Obligation                             
               On March 14, 1985, Payne & Potter borrowed $705,000 from Texas         
          Commerce Bank in Houston (TexCommBk) to develop four luxury                 
          condominium units on a golf course in Lakeway, Texas.  Petitioner was       
          shown on the loan documentation as guarantor of this $705,000 loan.         
               By 1987, apparently because of the declining regional real             
          estate market, Payne & Potter defaulted on its $705,000 debt                
          obligation to TexCommBk.  During 1987 and 1988, petitioner made             




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