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agreement. Jackson repaid the $50,000 loan on time and paid
Activewear 10-percent interest on the loan.
2. Additional Loans
Activewear then made more short-term loans to Jackson's
corporations. Petitioner wrote checks payable to Jackson or his
corporations drawn on Activewear's account. Jackson or his
corporations repaid the loans to Activewear, usually in less than
4 days with interest at 10 percent. Petitioner did not discuss
the loans to Jackson with Waddell after the first $50,000 loan.
Petitioner wrote the checks to Jackson on the Activewear checking
account and properly recorded each loan in Activewear's account
books. There were no written loan agreements.
Petitioner also personally lent $100,000 to Jackson at a
time not specified in the record. Petitioner borrowed that money
from a retired friend, Norman Hardin (Hardin). Hardin knew that
petitioner was going to lend the money to Jackson. As security
for that loan, in February 1991, Jackson gave petitioner a fourth
or fifth mortgage to a restaurant building. A neon light caused
a fire in the restaurant at a date not specified in the record.
In 1989 or 1990, Jackson gave petitioner two blank
promissory notes that he had signed as security for the loans
Activewear and petitioner made to him or his corporations. One
note was for Activewear's loans to Jackson and the other note was
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Last modified: May 25, 2011