Barry B. Bealor and Nancy L. Bealor, et al. - Page 48

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          in the case of MIT 80 and MIT 82, it would also owe accumulated             
          but unpaid interest.  Machise's burden would continue year after            
          year, as its obligations to make multimillion-dollar payments to            
          MIT 80, then to MIT 81, MIT 82, MIT 83, MIT 84, MIT 85, and MIT             
          86 became due, one after another.  It is difficult to believe               
          that Machise could survive such economic burdens--indeed, Machise           
          appears to have collapsed even before its repayment obligations             
          arose.  If Machise did not survive, the parties would never                 
          recover their money, and as we have noted, matters could get even           
          worse.  If Machise failed, its creditors might attempt to collect           
          on the partners’ notes to Machise.  Fred would then need the                
          termination agreements, or something like them, to cancel the               
          partners' notes to Machise before its creditors could try to                
          collect.  Otherwise, as Fred feared, the investors might well be            
          seriously displeased.  We therefore believe that Fred planned for           
          the termination agreements, or their equivalent, at the outset of           
          his employee leasing programs.                                              
               We recognize that Fred and Bruce provided the prospective              
          investors with projected figures showing that, ideally, the                 
          partners stood to profit upon their investments in the                      
          partnerships.  These profits would come in the form of accrued              
          compensation fees and late charges.  Fred has not provided any              
          factual basis for assuming that these figures were realistic.               
          The projections existed only in the abstract; they appear to be             
          based only upon the hopeful notion that Machise would earn enough           




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