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ASSIGNMENT
FOR VALUE RECEIVED, I hereby assign to KOLONAKI, a
California corporation, all of my right, title and
interest in and to the aforesaid promissory note dated
December 12, 1988 made by JUDY ALEXANDER [JAI] and
payable to GEORGE GEORGIOU in the principal amount of
* * * [the loan amounts].
The assignment clauses were signed by Georgiou and dated either
September 30, 1989, or September 30, 1990.
Bernard sent a letter to Georgiou dated April 16, 1991.
Enclosed with the letter were promissory notes for $400,000,
$532,000, and $16,100. The letter stated: "You must sign the
Notes * * *, and the Assignment Clause which is on the bottom of
each note * * *. Make copies for your accountant to give to the
[IRS] auditor."
In August 1991, Georgiou requested a written opinion from
Bernard regarding JAI's qualifications to file a consolidated
return with Kolonaki. In response to the inquiry, Bernard sent
Georgiou a letter dated August 23, 1991, that stated:
Since Kolonaki has the benefits of the ownership of all
the shares in Judy Alexander [JAI], pursuant to the
Holding Agreement dated October 15, 1988 between
Kolonaki and George Georgiou, it seems obvious, without
a formal opinion at this time, that the incidents and
benefits of ownership of Judy Alexander [JAI] accrue to
Kolonaki.
Throughout 1991 and 1992, the IRS agent requested
information by issuing information document requests. One
specific request was for documents that substantiated Kolonaki's
beneficial ownership of JAI. In response to the requests, Pryor
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