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termination would have had an effective date of January 1, 1988.
Because the termination would have affected the Medieval Times
companies, C&L advised them to consider accelerating any payments
that were scheduled to be made to the Netherlands Antilles
companies after January 1, 1988. Among the alleged various
payments that the Medieval Times companies had to make after
January 1, 1988, were amounts under the licensing agreements
between Manver and MDT and between Manver and MSI. Pursuant to
the Manver-MANV/MDT agreement, MANV had paid Manver $1,441,924 as
franchise fees for 1987, but MANV/MDT and MSI purportedly still
owed the balance of the contracts to Manver.
C&L and Santandreu determined that it would be possible for
the licensees (MDT and MSI) to prepay the royalties that were due
under the 5-year licensing agreements. The prepayment plan would
require the licensees to prepay the royalties in a lump sum up
front by financing the prepayment amounts with promissory notes
that allowed the licensee to pay interest only for 5 years, with
a balloon principal payment due at the end of the 5 years.
C&L advised that the lump-sum payment amount would have to
represent the discounted present value of the expected royalty
stream for the prepayment period. The information about the
income stream was provided to C&L by Medieval Times personnel.
In addition to the Florida and California lump-sum amounts,
lump-sum amounts were determined for the New Jersey and
Glendale/San Diego castles, even though these castles were not
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