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Although the Plan agreed to these loans, the Plan instead
paid $50,000 to Dura-Craft on February 22, 1983, and $25,000 to
Springbrook on April 27, 1983. On February 22, 1983, Dura-Craft
signed a note agreeing to pay David Christie and Milo Chapman a
total of $50,000 plus 12 percent interest, and, on April 27,
1983, Springbrook signed a note agreeing to pay David Christie
and Milo Chapman $25,000 plus 12 percent interest (collectively
referred to as corporate loans).
In 1985, Dura-Craft paid David Christie $10,000 on its
$50,000 corporate loan, and Springbrook paid Milo Chapman $10,000
on its $25,000 corporate loan. At that time, Dura-Craft reduced
its loan payable balance reflected in its accounting records by
the $10,000 it paid to David Christie. Springbrook also reduced
its loan payable balance reflected in its accounting records by
the $10,000 it paid to Milo Chapman. Due to an error,
Springbrook included the 1985 $10,000 loan repayment to Milo
Chapman on his 1985 Form W-2. Neither David Christie nor Milo
Chapman reduced his loan balance with the Plan in 1985.
As of January 1, 1986, the accounting records of Dura-Craft
had a loan payable balance to David Christie and Milo Chapman of
$40,000, and the accounting records of Springbrook had a loan
payable balance of $15,000.
On April 25, 1989, Springbrook paid the balance of its
corporate loan by issuing a check to the Plan in the amount of
$43,315 with the notation "princ $25,000 - int $18,315". On the
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