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Although petitioner’s cash-flow concerns may explain why the
bonus was not paid in cash during FYE 5/31/90, they do not
explain why petitioner allegedly took the unprecedented step of
issuing a note to Mr. Petar evidencing the deferred payment
obligation. In the following colloquy with the Court and Mr.
Cunniff, who was seated in the courtroom during Mr. Petar’s
testimony, Mr. Petar was given another opportunity to address
this crucial issue:
The Court: Okay. Is there anything else that I ought
to be aware of that you want to tell me?
Mr. Cunniff: Why the note was made out in the first
place, Frank.
The Witness: We made the note out for different other
reasons, you know. We needed some performance bonds
for the -- you know, for the bank and things like that.
Mr. Cunniff: The reason it ended up being made out was
because we showed on your personal return, your
personal financial statement, $100,000 owed to you and
they wanted to know why that was so you could go
through the bonding company, so that’s why -- that is
actually the reason why we made the note up. We didn’t
make it up for this thing at all. It happened to come
out all right.
The Court: Anything else?
Mr. Cunniff: Go ahead, tell him that.
The Witness: I think that is all, Your Honor, I have.
In his own testimony, Mr. Cunniff elaborated on the account
he had tried to elicit from Mr. Petar by means of his prompting
from the audience. According to Mr. Cunniff, the Note was not
issued before the close of FYE 5/31/90 for the purpose of
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Last modified: May 25, 2011