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It is fairly obvious in the agreement that Commercial
is forgiving approximately $4.8 million of debt. The
equity interest received is worthless and Commercial
intends to charge off the portion of the debt so
exchanged. The charge off will be taken during the
year ending June 30, 1988, and will be listed along
with Commercial's other loans charged off.
Ultimately, on the same day, after the tax advice had been
sought and received on the proposed transaction, the terms of the
draft agreement were integrated into a virtually identical final
agreement (the Agreement). The Agreement was reached between
Messrs. Gitlitz, Nicholson, and Winn, individually, and PDW&A,
Nicholson Enterprises, Parker Properties, Twenty Mile, Parker
480, ESL, and Commercial. The Agreement provided that Commercial
was contributing approximately $4.8 million of additional capital
through debt reduction to Parker Properties and Twenty Mile on
behalf of ESL. However, the terms of the Agreement also provided
that ESL would then convey its interests in both Parker
Properties and Twenty Mile (which was to include the $4.8 million
capital contribution by Commercial) to Nicholson Enterprises and
PDW&A for $5,000 each. Parker Properties, Twenty Mile, Parker
480, and their respective partners agreed to indemnify Commercial
and ESL from any claims made against them. The transaction was
to close on or before June 28, 1988.
Regarding the apartment mortgages, a separate agreement was
entered into between Commercial and Riverbank Acquisition
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Last modified: May 25, 2011