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its investor position through ESL. Commercial’s proposal offered
that: (1) Commercial would sell all of its interests in Parker
Properties and Twenty Mile for $7 million; (2) Commercial would
release Messrs. Gitlitz, Nicholson, and Winn from individual
liability on the Parker 480 loan; (3) Commercial would sell the
apartment mortgages for $12.5 million; (4) Commercial and ESL
would be released from all liabilities as a partner, on
outstanding letters of credit, and on any other contracts and
obligations; and (5) the transaction would be completed no later
than May 15, 1988.
On April 21, 1988, representatives of Commercial, ESL, and
Capitol Federal met with the investing partners and their
attorney to discuss the plans to liquidate Commercial's
interests. One possibility was to replace the Commercial loans
with those of another lender. Another possibility was to include
the Parker 480 property in the transaction, perhaps with an
increased purchase price. Capitol Federal would assume the $2
million sewer tap letter of credit, and the investing partners
would indemnify Commercial from any known liabilities. The sale
of the $12.5 million apartment mortgage notes was also suggested
as a possible condition.
On June 20, 1988, Commercial’s attorney faxed a rough draft
of the agreement to the investing partners’ attorney. This draft
included the following typed language:
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