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$2,550,150 to MIT 82 payroll account.
9. Employees and independent contractors are paid
$2,504,865 from the amounts transferred to the MIT 82
payroll account on a weekly basis with checks signed by
officers of Machise.
C. Repayment Phase.
10. In 1983, annual repayment begins with an alleged
Machise check and then its demand notes to MIT 82 of
$473,458 in compensation fees and late charges. After
1986, the repayment is made by MPC.
11. The demand notes are deemed to pass through the MIT 82
partners. Also on December 31, 1987, MIT 82
distributes the $190,000 line-of-credit note from BBPA
to its partners.
12. The demand notes, and the BBPA line-of-credit note, are
used to pay partners' installments on their 10-percent
notes to Machise.
Termination Agreement of MIT 82
On January 1, 1988, Fred drafted a Termination Agreement to
end the obligations of MIT 82 and MPC under the employee leasing
agreement. As recited in the agreement, MPC owed $2,307,059 to
MIT 82, and it offered to pay $1,974,901 by means of a 10-percent
note to MIT 82. MIT 82 accepted the offer as full payment and
agreed to terminate the employee leasing agreement. Under the
termination agreement, MIT 82 gave up rights to collect the
difference, some $332,158, from MPC.
The Termination Agreement required MIT 82 to distribute
MPC's note for $1,974,901, executed pursuant to the Termination
Agreement, to its partners. Under the Termination Agreement, the
partners were to direct MIT 82 to assign that note in payment of
amounts they owed MPC on their notes originally payable to
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