Stanley P. Zurn - Page 11

          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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