- 84 - The six W & A investors signed General Partnership Subscription Agreements in which they agreed to invest $4 million in cash before January 1, 1987. The initial capitalization of W & A was accomplished by BBPA lending the entire $4 million in capital to the six W & A investors. The six investors in W & A did not execute promissory notes for their subscription amounts to BBPA. BBPA did not issue a promissory note to W & A for the initial capitalization, but it did create an account payable to W & A for $4 million. The employee leasing agreement required W & A to deposit $3 million with BBPA, "the escrow agent", on January 1, 1987, so that BBPA could fulfill its obligations under the employee leasing agreement (the $3 million figure was incorrect and inconsistent with the partnership's and partners' subscription agreements; it should have been $4 million as the entire capitalization of W & A). W & A purportedly deposited $4 million in BBPA. No checks or notes were exchanged in these transactions; however, the transactions involving the shift of $4 million between BBPA, the investors in W & A, and W & A itself were all recorded in journal entries. Machise was required to pay to MPC, and MPC was required to pay to W & A, 105 percent of the payroll costs of the employees and independent contractors. This payment was the compensation fee. It was due and payable weekly as payroll costs werePage: Previous 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 Next
Last modified: May 25, 2011