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FiberComm assigned its Oregon rural statistical area number three
cellular telephone license to Blue Mountain Cellular Telephone,
Inc. (BMCT), another corporation solely owned by Kyle.
BMCT was formed in October 1990. In late 1990, BMCT entered
into an agreement to purchase for $3,615,771 a cellular telephone
license and other assets from WKBN Broadcasting Corp. (WKBN).
BMCT and WKBN were unrelated parties. During its negotiations
with BMCT, WKBN was advised and represented by a large nationally
known law firm.
The above purchase of the cellular telephone license and
other assets would allow BMCT to operate a cellular telephone
system in the rural statistical number eight area of Washington
State. Although WKBN's cellular telephone system for the area
began operating in January 1991, and as of March 31, 1991, there
were 85 subscribers to the system's cellular telephone services,
further extensive construction work with respect to the system
was needed.
To help effectuate its purchase of the Washington rural
statistical area number eight cellular telephone license and
other assets, in late 1990, BMCT applied to a local Indiana bank
for a letter of credit for approximately $2.99 million. The bank
issued the letter of credit after Mr. Mussman executed an
agreement pledging certain of NITCO's assets, including certain
certificates of deposit and interests in various governmental
securities, to cover the bank's potential liability under the
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