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Fred recommended that the partnership distribute this $755,514
receivable to its partners. The partners were thereafter listed
as creditors against the estate in bankruptcy of Anthony S. and
Miriam A. Bucci (Bucci was the 99.999-percent partner of MPC;
Intercoastal held the other .001-percent interest).
The Notice of Commencement of the Bucci bankruptcy case
stated: "At this time there appear to be no assets available
from which payment may be made to unsecured creditors." No
representative of BBPA attended the Creditors' Meeting in the
Bucci bankruptcy proceeding held on July 20, 1994. Fred
explained that it is "an absolute waste of time to attend * * *
these creditors' meeting when we know that there are no assets
available to be distributed." BBPA recommended that the partners
claim the amounts owed to them as bad debt deductions for the
year 1994.
None of the investors in MIT 85 ever received any cash
return on his or her investment in MIT 85.
MIT 86
Fred and Bruce organized and promoted MIT 86 as a general
partnership at the beginning of 1986. It also was very similar
to the previous partnerships. BBPA prepared financial statements
for MIT 86 as of December 31, 1986, and made adjusting journal
entries for 1987 and 1988.
MIT 86 had nine partners--six individuals, two partnerships
and one corporation. All were clients of BBPA. There were no
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