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September 22, 1981. The assignment document provides that
petitioner assign all its "right, title and interest in and to
the accounts receivable" of five of petitioner's largest
customers: United States Steel Corp.; Inland Steel Co.; Jones &
Laughlin Steel Corp.; Bethlehem Steel Corp.; and Midwest Steel
Corp., a division of National Steel Corp. The assignment
document also provides that petitioner will act as a collection
agent for Finance with respect to the above accounts and that the
above accounts
do now and at all times will aggregate in excess of
$28,000,000, and in the event a decline in the value of
one or more of the accounts would cause the aggregate
amount to be less than $28,000,000, * * * [petitioner]
will promptly assign additional customer accounts
sufficient that the aggregate of all assigned accounts
will be in excess of $28,000,000.
On October 15, 1981, Eichhorn, Eichhorn & Link issued a
second legal opinion reaffirming its letter dated October 7,
1981, and stating that in its opinion, Finance was capitalized as
set forth in the prospectus.
Petitioner did not change the manner in which it recorded
sales and accounts receivable information as a result of
executing the assignment document. The moneys petitioner
collected on the accounts receivable that were listed in the
assignment document were not set aside in a special account, but
were placed in petitioner's general corporate funds.
Petitioner's audited financial statements covering September 1981
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