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The MIT 85 agreement was similar to those of the earlier
partnerships. The employees and independent contractors were the
same employees and independent contractors who had earlier
provided their services to Machise before the MIT 85 employee
leasing agreement was made. After this agreement, Bucci still
directed and controlled the employees.
The 10 partners executed notes to Qulart in face amounts
aggregating $2,160,000. This aggregate amount was equal to 80
percent of MIT 85's capital. The notes bore interest at the
annual rate of 15 percent. They were to be repaid in 10 level
annual payments. Qulart issued a similar note to Machise, which
then issued a $2,160,000 demand note dated July 1, 1985, to
Qulart. This note circled from Qulart to the 10 investors who
allegedly directed Qulart to endorse the note directly to MIT 85.
In addition to issuing the notes, the investors were
required to put up, in the aggregate, $540,000 in cash as the
other 20 percent of their capital investment in MIT 85.20 The
investors paid substantial amounts of this cash to BBPA during
1985. BBPA was supposed to advance to MIT 85 the cash required
of the investors in MIT 85. BBPA issued neither cash, nor a
check, nor notes to accomplish this advance. The advance,
20The employee leasing agreement for the previous
partnership, MIT 84, had required MIT 84 to advance ten-elevenths
of its invested capital to Machise. The MIT 85 employee leasing
agreement, however, required MIT 85 to advance all its invested
capital to Machise. This totaled $2,700,000--$2,160,000 in notes
from its partners and $540,000 in cash.
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