James K. Wise and Claudia R. Wise - Page 6

                                        - 6 -                                         
          Weimar Bank Indebtedness                                                    
               In April 1983, the $300,000 debt, plus accrued interest of             
          $22,553.42, to Weimar Bank matured.  At the time of maturity, the           
          obligors on the loan were Wood, Klutts, and petitioner.  Unable             
          to pay off the loan, the obligors and Weimar Bank entered into              
          another loan agreement (referred to as a renewal agreement),                
          effective April 26, 1983.  As a condition for renewal, the bank             
          required payment of the accrued interest and a pledge of                    
          collateral.  Because the obligors could not make a payment, Heger           
          arranged for Klutts and petitioner to borrow $52,553.42 from                
          Weimar Bank (loan #2).  Of that amount, $22,553.42 was applied as           
          payment of the accrued interest on the original indebtedness.               
          The balance, $30,000, was transferred to the National Bank of               
          Commerce to pay a secured debt owed by Wood. The collateral on              
          the secured debt, certain oil and gas wells in which Wood had an            
          interest, was then released.  Thereafter, the oil and gas wells             
          were pledged as collateral on the original Weimar Bank                      
          indebtedness.                                                               
               By April 1983, petitioner and his partners were                        
          substantially in debt.  Eventually, Wood and petitioner had                 
          approximately $3 million in personal liability on debts incurred            
          in connection with the various partnerships and joint ventures.             
          Wood's indebtedness at Weimar Bank reached such a high level that           
          the bank would not give him any additional financing.                       






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