conducted at a site in Harrison, Ohio, that had been acquired
from Campbell Hausfeld.
APECO had a history of losses. On its Federal income tax
return for its fiscal year ending June 30, 1989, it reported that
a net operating loss (NOL) of $4,472,915 was available for
carryover to its fiscal year ending June 30, 1990, and that NOL
was carried over. During relevant times, APECO received loans
from Mr. Kluener and Fifth Third to finance its operations. As
of January 1, 1989, APECO owed Mr. Kluener $800,000. On or about
April 19 and June 12, 1989, he made loans of $700,000 apiece to
APECO using funds from his agency account to fund all or a
portion of each loan. As of June 30, 1989, APECO owed Fifth
Third $3,885,000, and, on or about July 31, 1989, APECO obtained
a final loan of $1,500,000 from the bank, bringing its
indebtedness to Fifth Third to $5,385,000. Mr. Kluener
guaranteed Fifth Third's loans to APECO.
During 1989, APECO's personnel were developing a variety of
new or improved products, including more durable sprayer parts, a
high-volume, low-pressure spray gun, and a Do-It-Yourself paint
sprayer. Mr. Kluener dictated the products that APECO's
personnel were to develop. During mid-1989, a project to develop
a new type of paint sprayer was just beginning and did not yet
have a name. The concept on which the sprayer was based called
for a new method of powering the sprayer mechanism and involved a
different design than had been used previously. At a June 8,
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