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gave the agent the backdated Holding Agreement, Supply Agreement,
minutes, and promissory notes.
In a letter dated December 13, 1991, Bernard informed Pryor
that Bernard just became aware of the October 15, 1988, date on
the Holding Agreement. The letter stated:
I discovered, to my chagrin, that the Holding Agreement
contains an obvious error which, if not called to the
attention of the person to whom it was delivered, could
be misleading.
* * * * * * *
As you know, the Holding Agreement was, in fact,
drafted on August 6, 1991 to memorialize the
understanding which Mr. Georgiou and Kolonaki had
reached in October 1988. * * *
Bernard stated in the letter that the inaccurate date was a
typographical error that was the result of "boilerplate" language
on his computer. Bernard asked Pryor to forward the information
about the error to the agent.
The agent also requested information from Ernst and Young
regarding Kolonaki's beneficial ownership. In a letter dated
February 13, 1992, Ernst and Young informed the agent: "We first
learned in writing of the holding agreement upon receipt of the
client representation letter dated September 24, 1991, for the
1990 fiscal year."
Respondent disallowed the JAI loss that was deducted by
Kolonaki on Kolonaki's 1990 Form 1120 tax return.
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