Lee D. Froehlich - Page 9

                                        - 9 -                                         

          floor plan loan is intended to finance the purchase of new car              
          inventory through the time they are sold.  Under floor plan                 
          loans, the lender purchases automobiles that are received in the            
          auto dealership's inventory.  Each time an automobile is sold,              
          the dealership is required to pay the lender the cost of that               
          automobile.                                                                 
               On August 4, 1987, Sanwa Bank informed the auto dealership,            
          attention of petitioner, that the floor plan line of credit for             
          $2,500,000 had been increased to $3,500,000, effective July 29,             
          1987.  The auto dealership, represented by petitioner, in an                
          unsigned and undated document entitled "Certified Corporate                 
          Resolution To Borrow", sought to borrow up to $3,500,000 from               
          Sanwa Bank.                                                                 
               On July 31, 1988, Sanwa Bank increased the floor plan loan             
          to $5 million.  Sanwa Bank issued a promissory note entitled                
          "Commercial Optional Advance Promissory Note".  Petitioner's name           
          is shown on the document as president of the auto dealership.  On           
          the same date, in a related document entitled "Continuing                   
          Guaranty", petitioner was listed as "Guarantor".                            
               Petitioner's auto dealership opened March 1987 and during              
          the first 2 years, it was the number one Acura dealer in the                
          United States.  In the middle of 1989, petitioner's auto                    
          dealership began experiencing financial reverses because of an              
          economic downturn in the State of California and because of the             





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011