- 10 - WHEREAS, [ESL] is willing to sell its joint venture interest in Parker Properties and Twenty Mile for the sum of $10,000.00 and Commercial is willing to accept the sum of $10,990,000.00 in full settlement and satisfaction of its above-described loan balances, all subject to fulfillment of the terms of this Agreement, and Parker Properties is desirous of purchasing such joint venture interests and paying the outstanding balances of the loans to Commercial as adjusted. The draft agreement also provided that Parker Properties would pay ESL $10,000 for its interest in Parker Properties and Twenty Mile. In addition, Parker Properties was to pay Commercial $7,990,000 cash and deliver a $3 million promissory note. Handwritten just above the terms of the agreement appeared the following: "WHEREAS Prior closing Commercial will contribute capital to and reduce indebtedness - ESL wholly owned subs". On June 22, 1988, the investing partners' attorney faxed Commercial and its attorney a followup letter outlining the transaction and referring to "what the borrower would like the transaction to look like." The letter contained the following chart which detailed "how the transaction would result": Convert to Debt Equity Forgive To be Paid Note Parker Properties $9,319,963 $3,419,963 --- $2,900,000 $3,000,000 Twenty Mile 3,395,492 1,395,492 ---2,000,000 --- Parker 480 3,256,910 --- $156,9103,100,000 --- Total 15,972,365 4,815,455 156,910 8,000,000 3,000,000 On June 28, 1988, Commercial’s accountant was asked to provide his comments "from a tax standpoint." Based on his understanding of the proposed agreement, the accountant opined that:Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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