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petitioner for all funds advanced in connection with the Century
project. Petitioner, who was not a shareholder of Cities,
refused the offer of what he believed was worthless preferred
stock in Cities. The agreement also provided that payment would
be made from the credit line at the time it would be approved by
a finance company, and it stated that it was anticipated that the
$375,000 credit line application would "be cleared on or before
November 20, 1986." Ultimately, a credit line was not approved.
Throughout the period under consideration, Cities
experienced financial difficulties. Ultimately, petitioner
advanced a total of $677,652. Cities was removed from the
Century project and, thus, the road construction equipment had to
be stored. Jim Francis, who maintained a storage facility in
Bakersfield, California, stored the equipment. The storage fees,
however, became past due, and, ultimately, the machinery was not
recovered from Mr. Francis.
Cities was removed from the Century project before
December 31, 1987. Ms. Jackson, however, into 1989, attempted,
without success, to revitalize Cities without petitioner’s
assistance, financial or otherwise. During 1988, Ms. Jackson
spent most of her time attempting to collect from local
governments for work performed. On December 20, 1988, Ms.
Jackson advised petitioner, by letter, of the events surrounding
her attempts to continue and/or improve Cities’ business.
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