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obligation to Proz was matched (and, in the computer equipment
activity, slightly exceeded) by the respective obligation of Sha-
Li and RTS to petitioner.
2. Circularity
In both activities, not only were the payments matching, but
the flow of payments was circular. It would thus appear to make
no difference whether the payments were made or not, so long as
each of the parties in the circle did the same thing. Indeed, in
the telecommunications equipment activity, virtually no scheduled
payments were made for the first 7 months. Payment lapses also
occurred in the computer equipment activity. Moreover, in the
telecommunications equipment activity, when the payments were
automated, by instructing a bank to debit and credit each
participant's account, the payments flowed the wrong way around
the circle--from petitioner to RTS to Proz to petitioner, rather
than from petitioner to Proz to RTS to petitioner--for over
7 years. Sha-Li performed bookkeeping services for Proz and RTS.
A bookkeeper employed by Sha-Li discovered the reverse flow of
payments in 1985 or 1986. The bookkeeper did not bring the
reverse flow of payments to petitioner's attention. The parties
have stipulated the reasons she failed to do so. Among those
reasons are the following:
1. She believed that as president of RTS, petitioner had
more important things to be concerned with,
2. By the time the bookkeeper learned of the reverse flow
of payments, the payments had been circling in that
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