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note dated October 11, 1988, in the amount of $345,000. The
promissory notes that Northwest gave to petitioner required that
interest at the rate of 10 percent per annum be paid in full
annually. According to the information available as of October
18, 1988, Northwest owed petitioner $1,019,176.50, and Moore,
acting as vice president of Northwest, gave petitioner a 1-year,
interest-bearing promissory note dated October 18, 1988, in that
amount.
Wilcox returned to Coeur d'Alene, Idaho, in November 1988 to
install petitioner's accounting system at Northwest, which took
approximately 6 weeks. During that time, Wilcox discovered that
Northwest owed more money to Chrysler First. After Wilcox and
Nicholson met with Chrysler First personnel in Seattle,
Washington, Wilcox requested an additional $385,000 from
petitioner to pay Chrysler First pursuant to petitioner's
guarantee. On November 3, 1988, petitioner agreed to lend
Northwest an additional $385,000, and Moore, acting as vice
president of Northwest, gave petitioner a 1-year, interest-
bearing promissory note dated November 4, 1988, for that amount.
While establishing an accounting system for Northwest,
Wilcox closed old accounts, opened new ones, and placed various
financial controls on Northwest's future operations. Wilcox
closed four of Northwest's five existing bank accounts, and the
fifth was used as a depository account to which Nicholson did not
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