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notes, aggregating $170,000, were dated January 1, 1983. They
were payable January 1, 1984. Some of the investors paid these
notes with cash, while others paid by means of offsets. Some
portions of these notes remain unpaid.
As with MIT 82, Bruce executed a "line-of-credit" note,
dated January 1, 1983, from BBPA to MIT 83, whereby BBPA could
borrow up to $300,000 in investor cash from MIT 83 at a 15-
percent interest rate. Of the investors' cash paid in, BBPA
retained $46,500, a draw on the line-of-credit note. Pursuant to
the line-of-credit note, MIT 83 also endorsed, or otherwise
transferred to BBPA, the $170,000 in short-term partner notes.
Machise executed a second line-of-credit note to BBPA, also
dated January 1, 1983, whereby Machise could borrow up to
$180,000 of the investors' cash from BBPA. Some $69,800 in
investor cash was originally disbursed to Machise. Machise
became obligated to BBPA in this amount.
As a result, MIT 83 had a corresponding "receivable" account
from BBPA for $284,300, represented by its line-of-credit note
from BBPA.14 Another $13,669 of investors' cash went to BBPA as
14This amount consisted of the $46,500 of investor cash BBPA
retained, plus the $69,800 given to Machise, plus $168,000 in
short-term investor notes owed by BBPA in lieu of the unpaid cash
required of the eight investors. The difference between the
$170,000 figure for the short-term notes and $168,000 reflects a
correction with respect to deposits. The cash paid out exceeds
the amounts of cash stipulated as having been paid in during
1983. The difference of $2,559 is not explained; it may have
come from interest payments or from additional payments on the
(continued...)
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