- 6 -
C. Mr. Friedland’s Transfers of UBI Stock to UNB
1. 1991 Agreement
Mr. Friedland executed an agreement (the 1991 agreement) UNB
presented to him dated January 3, 1991, in which Mr. Friedland
transferred 5,518 shares of his UBI stock to UNB. Mr. Friedland
also pledged and granted a security interest to UNB in his
remaining 6,857 shares of UBI stock (the pledged stock) to
secure, upon the foreclosure sale or other disposition of the
Hillsboro property by UNB, an amount equal to one-half of the
excess of the amount owed to UNB on the $2.6 million loan and the
amount realized by UNB upon disposition of the Hillsboro property
(the loan deficiency).4 The 1991 agreement further provided that
UNB had no recourse against Mr. Friedland’s assets other than the
pledged stock, Mr. Friedland had no personal obligation on the
$2.6 million loan, and Mr. Friedland’s sole future involvement
with the $2.6 million loan was his pledge of the pledged stock.
UNB accepted the 5,518 shares of UBI stock as full payment of the
$750,000 loan5 and released Mark from his guaranty of the $2.6
4 Mr. Friedland retained the right to substitute cash in
the amount of the book value of the pledged stock as collateral
under the 1991 agreement.
5 On Jan. 15, 1991, UNB recorded on its books the fair
market value of the 5,518 shares of UBI stock Mr. Friedland
conveyed to it pursuant to the 1991 agreement as $468,750. On
Feb. 1, 1991, UBI redeemed those shares from UNB for that amount.
UNB released CC and Mark from liability under the $750,000 loan
and charged off $280,154--the difference between the $748,904
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011