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pulling the servicing from your company." FAMC complied with
Wright's request in October 1988.
Shortly after purchasing the stock of FAMC, Leste and Moore
entered into discussions with a consultant, Donald G. Shirk
(Shirk), who offered to assist FAMC in contacting banks and other
mortgage lenders and in acting as a broker in the buying and
selling of mobile home loan pools. In a letter to Moore dated
March 10, 1988, Shirk stated that his services could assist FAMC
"in developing large, profitable servicing portfolios." In his
letter, Shirk proposed a fee for his services of $500 per day plus
office rental expenses and reimbursement for other reasonable and
verifiable expenses. An oral agreement was reached pursuant to
which Shirk was hired as a consultant to FAMC on substantially the
same terms as outlined in his letter to Moore. Thereafter, Shirk
submitted billing statements to FAMC pursuant to the agreed per
diem consulting fee and expense reimbursement arrangement. The
record does not indicate whether Shirk entered into a covenant not
to compete with FAMC.
Shirk provided consulting services to FAMC through March 1989,
when it was determined that he was not generating an appropriate
level of new business to replace FAMC's declining loan pool
balances. Effective April 1, 1989, Shirk's compensation under the
consulting agreement with FAMC was changed to a commission-only
arrangement, whereunder Shirk was paid only when he brought in new
business. In the final 5 months of the original per diem consulting
arrangement, FAMC paid Shirk a total of $35,542 in consulting fees
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