Medieval Attractions N.V - Page 30

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          transferred $10 million to Gatetown.  Gatetown transferred the              
          money to MDT and MSI.  MDT and MSI issued commercial paper to               
          five entities that were controlled by the Spanish investors,                
          notwithstanding that the five entities did not contribute any               
          funds to MDT or MSI.  MDT and MSI used the $10 million combined             
          with promissory notes to pay Manver a total of $10 million cash             
          and $12.5 million in promissory notes.                                      
               To avoid withholding on the interest on the $12.5 million in           
          notes to Manver, a round of commercial paper was issued.  During            
          March 1988, Manver transferred $9.03 million to Gatetown.  The              
          funds went through a myriad of controlled entities, within a day            
          or two, and ended with MDT's transferring $7.672 million to                 
          Manver as payment on the royalties.  Manver then transferred                
          $2.672 million to Gatetown, which then transferred the money                
          through a series of controlled entities, eventually to have                 
          $3.354 million transferred back to Gatetown, which transferred it           
          to MSI, which in turn transferred it to Manver.  Petitioners                
          effectively used $7.672 million of funds supplied by Manver to              
          reduce debts to Manver by $11 million.                                      
               As subsequent rounds of commercial paper were issued, the              
          interest payments that were made to the controlled entities were            
          then distributed to the Spanish investors' Eurotor companies.               
          The use of the commercial paper not only provided an opportunity            
          to avoid withholding on the interest, it also provided a method             






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