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October 11, 1989, Mr. Motley's liabilities exceeded his assets by
$13,497,675. On October 16, 1989, NCNB agreed to allow the cash
sale of the property for $11,600,000 and to settle with Mr.
Motley on his guaranty for $175,000.
On November 3, 1989, Briarpark, Mr. Motley, Dan Associates,
and NCNB entered into a conditional release agreement (November
3, 1989 agreement).3 In the November 3, 1989 agreement, NCNB
agreed to release the property from all liens and security
interests upon satisfaction of the following conditions: (1) The
sale of the property to Dan Associates for a minimum sale price
of $11,600,000, (2) the assignment of the sale proceeds to the
bank, (3) the transfer of Briarpark's cash reserves, and (4) the
payment of $175,000 by Mr. Motley to the Bank.
On December 27, 1989, the outstanding balances of the
modified loan and the build-out loan were $24,562,763 and
$1,019,418, respectively. Briarpark sold the property to Dan
Associates for $11,600,000. Briarpark incurred selling expenses
of $554,901. Dan Associates paid $10,936,532 of the proceeds to
NCNB. The adjusted basis of the property was $11,661,245. Also
on December 27, 1989, NCNB released the liens against the
property and released Mr. Motley from his guaranty of the
modified loan. Mr. Motley paid $175,000 in cash to the bank.
3The complete terms of the conditional release agreement
were not available, for a page of the agreement was missing from
the joint exhibit provided to the Court.
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