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Interfirst received the share drafts, it had no reason to believe
that they could be dishonored.
Because the Stubbeman firm was responsible for a number of
closings in New York, and because it was issuing the tax opinion
in those issues, it was decided that the Stubbeman firm, rather
than Mr. Christopher's firm (the actual bond counsel) would be
present. Mr. Christopher had no reason to mistrust the Stubbeman
firm.
On or about December 31, 1985, Mr. Newman telephoned Mr.
Christopher to tell him that the Bonds had been sold. Mr. Newman
did not, however, immediately inform bond counsel or county
authorities of the change in underwriters. Mr. Newman did not
convey to bond counsel the fact that a substitution of
underwriters had occurred until after the beginning of 1986.
Thus, Mr. Christopher first learned on February 10, 1986, from a
Drexel employee that Matthews & Wright--and not DLJ--was
warehousing the Bonds. Mr. Christopher was upset with the news.
He telephoned Mercantile Capital Corp., leaving a message as to
his displeasure at not being informed of the change in
underwriters. Two days later he further learned that Drexel was
out of the deal. On the same day, he was advised by Mr. Newman
that because the Bond documents were still in escrow, they could
be amended without following formal amendment procedures.
Had Mr. Christopher been aware of the developments
surrounding the issuance of the Bonds, he would not have
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