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The purchase price was agreed to be $4.30 per square foot
multiplied by the property's total square feet. The contract
provided that REI would finance part of the contract price and
that the remainder would be paid in cash.
BCI needed to raise funds to pay the cash portion of the
purchase price. It approached Leonard Thomas, a real estate
agent and mortgage broker, to locate a party willing to finance a
portion of the acquisition. Mr. Thomas brought BCI and State
Savings and Loan Association of Lubbock (State Savings) together.
He previously had been hired by State Savings to find profitable
real estate investments for the institution. Mr. Thomas had
arranged 20 to 30 such investments for State Savings. After the
closing of each deal, Mr. Thomas monitored the investment on
behalf of State Savings.
State Savings was wholly owned by Terry Barker. When Mr.
Barker acquired it, the institution was experiencing severe
financial difficulties. Mr. Barker had no previous experience in
the savings and loan industry and often complained about
regulatory restrictions on the ability of a savings and loan
institution to participate in the business dealings of its
clients. In a bid to earn profits and save the institution, Mr.
Barker arranged for State Savings to finance numerous real estate
transactions in which the institution shared the profits.
By commitment letter dated March 18, 1983, State Savings
offered to finance the least of (1) $6,400,000, (2) the appraised
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Last modified: May 25, 2011