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The $3,500,000 Empire lent to Parker, was evidenced by a
June 26, 1985, promissory note, which was subscribed to by Parker
480 and Messrs. Gitlitz, Nicholson, and Winn, individually. The
note was nonrecourse as to Parker 480, and recourse as to the
individuals in Parker Properties and Twenty Mile.
The Agreement in Controversy
On April 30, 1987, Commercial Federal Savings & Loan
Association (Commercial) acquired Empire and ESL from its holding
company, Baldwin United Corp., which was then in a chapter 11
bankruptcy proceeding. Accordingly, Commercial was the successor
in interest to Empire’s loans and involvement in the subject
partnerships. Due to a declining real estate market, Commercial
did not want to be associated with the joint ventures through ESL
or extend any additional credit to the real estate venturers. It
was Commercial’s wish to dispose of the debt and equity interests
it had in the joint ventures.
Commercial met with Parker Properties and Twenty Mile
partners during the summer of 1987. At that meeting, Commercial
expressed its desire to liquidate its positions as a creditor
and, through ESL, an investor in Parker Properties and Twenty
Mile. It was Commercial’s desire for the partners of Parker
7(...continued)
trust. "Equity" is described in the same instrument as the net
sales proceeds on any portion of the property sold and the deemed
net sales proceeds of the remaining property with the deemed
sales price determined by an agreed-to appraisal process.
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Last modified: May 25, 2011