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marketing strategy, petitioner secured national department stores
including J.C. Penney’s, Bloomingdale’s, the Bon Marche, Dayton
Hudson, Marshal Field’s, and Dillards as new customers for
petitioner’s products.
When Ms. Burton became president of petitioner, petitioner
had a $60,000 line of credit with the Bank of Puget Sound. When
the Bank of Puget Sound refused to increase petitioner’s line of
credit, Ms. Burton approached other banks. SeaFirst Bank agreed
to provide petitioner with a $100,000 line of credit. From 1988
through 1990, Ms. Burton and Mr. Burton worked closely with
Robert Drugge, a vice president of SeaFirst Bank, to increase
petitioner’s line of credit to finance petitioner’s expansion.
SeaFirst Bank began providing letters of credit that were used by
petitioner and issued to manufacturers of petitioner’s products.
On or about June 1, 1990, SeaFirst Bank increased petitioner’s
line of credit to $2,700,000. During the relevant periods,
Ms. Burton, Mr. Burton, and Denovan signed personal guaranties to
guaranty the repayment of lines of credit extended by the Bank of
Puget Sound and SeaFirst Bank.
Mr. Burton, as secretary and treasurer of petitioner, was
responsible for all accounting functions of petitioner, prepared
financial plans and budgets, prepared loan applications, and was
in charge of relations with SeaFirst Bank. Mr. Burton studied
accounting and computer operations at a community college.
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