All or a portion of the funds for the loans made on or about
March 27, July 29, and September 23, 1991, were funded by
distributions from Mr. Kluener's agency account.
During mid-1991, Mr. Kluener's and APECO's notes to Fifth
Third were renegotiated. As part of that renegotiation, the
pledges of assets made during 1990 were canceled, and a new
arrangement was substituted. The Klueners signed a new
promissory note to Fifth Third that was dated June 25, 1991, in
the principal amount of $15,985,000 and that bore interest at the
prime rate. The note provided that its principal amount would be
due in full 60 days after the death of the last of them to die.
By letter dated June 25, 1991, and addressed to Fifth Third, the
Klueners agreed, inter alia, to maintain substantially all of
their investment assets in the agency accounts in each of their
names, to not substantially increase their expenditures to
maintain their standard of living, and to invest no more than an
additional $3 million in APECO. Prior to this time, Ms.
Kluener's assets were not subject to the claims of Fifth Third
arising from its loans to Mr. Kluener and APECO.
Between Mr. Kluener's death on October 14, 1991, and May
1992, his estate made additional advances to APECO totaling
$1,292,000. APECO eventually was sold for $2,500,000.
OPINION
The issue to be decided in the instant case is whether APECO
was the actual seller of the horses, as petitioners contend, or
Mr. Kluener was the seller, as respondent contends. If we decide
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011