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With respect to petitioner's second contention (viz., the
use of cash collateral for the loans at issue from the U.S. banks
in question obviated the need to obtain the consent of Mr. Jee in
order to encumber those partnerships' assets), there is nothing
in the record that supports petitioner's contention that that
need affected the form of any of the Bank transactions. During
the years at issue, Radcliffe and BOT held a majority interest in
NMSC and 300 Montgomery Associates, respectively. Respondent
concedes that Mr. Jee's consent would have been required in order
to encumber the assets of those partnerships, see Cal. Corp. Code
sec. 15009(3)(a) (West 1991), but there is no indication that Mr.
Jee would have refused to grant it. In fact, in February 1986,
apparently in an effort to restructure the existing Bank loans
that were secured by cash deposits, petitioner requested Union
Bank to consider making a new loan to Radcliffe and/or BOT in the
amount of $8,400,000 that would have replaced those existing
loans and that was to be secured by the buildings owned by NMSC
and 300 Montgomery Associates. This indicates to us that peti-
tioner did not consider obtaining Mr. Jee's consent an obstacle
to the funding of loans that were to be secured by those build-
ings.93 Furthermore, petitioner testified that, in order to
92(...continued)
rate of interest on its loans.
93 It is not altogether clear whether petitioner knew when he
made that request in February 1986 that Radcliffe was to acquire
(continued...)
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