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result of the satisfaction, petitioners retained possession and
title to the equipment.
3. Bank of Whittier
On August 20, 1985, the Bank of Whittier loaned petitioners
$250,000. On January 15, 1986, petitioners gave the Bank of
Whittier a security interest in 16 vending machines to secure the
loan. The Bank of Whittier caused notice of the security
interest to be filed under provisions of the California Uniform
Commercial Code. According to the security interest documents,
petitioners’ corporations owned the vending machines. The loan
was guaranteed by the corporations and, ultimately, was
defaulted.
On February 24, 1986, petitioners and the Bank of Whittier
agreed that the $241,066.01 unpaid principal loan balance would
be satisfied from a new loan to be issued to Mrs. Bowden and
guaranteed by Mr. Bowden. In turn, the Bank of Whittier released
all corporate guaranties and assigned its security interest in
the 16 vending machines to Mrs. Bowden. Also pursuant to the
same agreement, Mrs. Bowden assigned her one-third interest in
LBJ Properties to the Bank of Whittier.6 The settlement
agreement is silent as to the ownership of the vending machines.
Payments on this loan were made by petitioners individually and
6 The record does not otherwise divulge further information
about LBJ Properties.
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