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Petitioner hired Continental Title Co. (Continental) to
provide escrow services and title insurance for the transaction.
The conveyance, assignment, and transfer by Pecaris to Coastal of
the Mall real property, leases, and tangible personal property
all occurred in February 1988. The purchase agreement as written
contemplated a straight sale of the Mall to Coastal for $4.8
million cash, and the fee paid to Continental was determined on
the basis of that stated purchase price.5 However, petitioner
and Mr. Giorgi lacked the personal resources that would have
enabled Coastal to pay the additional $700,000 in cash required
to consummate the transaction for the stated purchase price of
$4.8 million. The escrow and financing statements show that only
$4.1 million of mortgage loan proceeds were deposited in the
escrow account, and that the $700,000 shortfall was made up of
credits in that amount.
The $700,000 of credits was attributable to two items:
First, petitioner informed Continental, in writing, that HGM had
"received a note from Coastal * * * in the amount of $100,000
* * * in payment in full from Pecaris" to HGM of the commission
due from Pecaris for petitioner's handling of the sale of the
Mall. The record contains no evidence that the $100,000 deposit
called for by the purchase agreement was ever made, or that any
5In addition, the real property transfer tax of $4,800
represented a $1 payment per $1,000 paid as consideration for the
transfer.
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