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C. Jackson
Jackson had been petitioner's friend since petitioner
attended college. Waddell did not know Jackson.
In 1985, Jackson gave Activewear a short-term loan to help
it meet its payroll. Activewear repaid the loan. Jackson
continued to make short-term loans whenever Activewear had a
cash-flow problem. Activewear always repaid those loans.
In the years in issue, Jackson owned Greensboro Ford and
Carey Station, Inc. (Jackson's corporations). Jackson's wife was
the majority shareholder in a campground in Tallulah Falls,
Georgia.
D. Activewear's Loans to Jackson's Corporations
1. Initial $50,000 Loan
Around November 1989, Jackson's corporations began to have
cash-flow difficulties. Jackson asked petitioner for a short-
term loan. Jackson offered to repay the loan in a week, to pay
10-percent interest, and to provide three classic automobiles as
collateral. Petitioner believed Jackson was a good credit risk.
Activewear had funds available to make the loan. Petitioner
asked Waddell to authorize Activewear to lend $50,000 to
Jackson's corporations. Waddell approved the loan. Activewear
then lent Jackson's corporations $50,000 based on an oral
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