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pending in docket No. 3462-92. Respondent has agreed that such
an adjustment would be appropriate if we so determine.
On January 1, 1988, Fred prepared a Termination Agreement to
end the obligations of MIT 86 and MPC under the employee leasing
agreement. MPC owed $4,266,993.53 to MIT 86 pursuant to the
employee leasing agreement. Under the Termination Agreement, MPC
offered to pay $3,175,000 to MIT 86 by transferring to MIT 86 the
$3,080,000 note made by Qulart to Machise, now held by MPC, with
a balance, including accrued interest, of $3,175,000.67. No
formal assignment of this amount took place, however.
The Termination Agreement also recited that, after MPC
assigned the Qulart note to MIT 86, the balance due to MIT 86
would be $1,091,992.86. The Termination Agreement further
provided that MIT 86 had agreed to reduce that balance by
$14,685.86 and to cancel the 10-percent annual late charge. Fred
computed the net amount due to MIT 86, some $1,077,307, so that
it would equal the amount that he had projected as the aggregate
income to the MIT 86 investors.
Additionally, under the Termination Agreement, MIT 86 was
required to distribute the Qulart note to its partners. They
were to direct MIT 86 to assign that note back to Qulart, the
note's maker, in payment of amounts they owed Qulart on their
investor notes. No formal assignment of this note, however, was
ever made.
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