- 8 -
deeds, and the seller and buyer would have no further obligations
to each other.
On or about June 5, 1984, all partners, other than Derrick,
contributed funds to the partnerships as initial capital
contributions. At about the same time (early June 1984), the
partners executed written, formal partnership agreements, which
stated that they were "effective as of December 15, 1983."
Subsequently in June 1984, each partnership admitted additional
partners by means of capital contributions and execution of the
latest written agreements. In 1984, the partnerships elected an
interim closing of their books on the basis that the condominium
sales occurred in December 1983, in order to allocate profit and
loss between the original and new partners.
Each partnership timely paid the July 2, 1984, installment
to the seller, and the escrow agent recorded documents in
accordance with the written agreements. The source of the July
2, 1984, installment payments, for each partnership, was
approximately $1 million from capital contributions and
approximately $4,200,000 attributable to nonrecourse loans from
Western Savings. The loans were amortized on a 30-year schedule
subject to an 8-year call, and included shared appreciation
provisions for the lender. Legal title to the condominiums did
not pass to the partnerships until on or after July 2, 1984.
During November 1984, Derrick represented the partnerships
before the condominium owners association, and financial
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011