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involvement undisclosed and/or petitioner's propensity to enter
into undocumented and informal relationships coupled with his
aversion to lawyers.
Key to our analysis, however, are the circumstances at the
time petitioner began his involvement with Ms. Jackson. Her
prior enterprise was in bankruptcy, and litigation in Federal
court was pending regarding the prior enterprise's contract.
Although a corporate entity had been formed (Cities), it was
without funding and needed initial capital to pursue the Century
project. Ms. Jackson was in a position to offer her business
acumen and the preferred status of Cities, her minority-owned
corporation. In this regard, Ms. Jackson's most recent business
experiences had been less than successful. Petitioner had
government and road construction experience, and most
importantly, he was a source of funding. Under these
circumstances, we find that petitioner's capital investment in
the joint venture was $52,000, consisting of the initial $12,000
payment made in June 1986 and the $40,000 insurance payment.
These amounts were prerequisites to obtaining the Century
project. The remaining advances are to be treated as loans to
the joint venture.
Having decided that petitioner was engaged in a joint
venture, and the allocation of the total amount of advances into
discrete categories, we next consider the parties' positions
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