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One of these entities operated a restaurant and was called Out of
Bounds, Inc. Another entity was Noel Exploration, Inc., a
corporation engaged in the oil and gas business. The bank used
separate customer numbers for Noel Exploration, Inc. (Cust.
No. 10408), Out of Bounds, Inc. (Cust. No. 10626), and petitioner
(Cust. No. 10398). Typically, the loans from the bank were for
terms of 1 year. At the end of the term, petitioner typically
rolled the outstanding principal and accrued interest into a new
1-year loan.
On December 3, 1984, the bank lent petitioner $549,312 from
an unsecured line of credit (loan No. 10398/100160),5 $497,620 of
which was used to pay off a prior unsecured line of credit for
Out of Bounds, Inc., and $51,692 was used to pay off the accrued
interest.
On September 4, 1985, the bank lent petitioner $1,100,000
(loan No. 10398/102971). Of this amount, $650,000 was used to
purchase 283 acres of land called the "Overland Trail" property,
and $439,323 was used to satisfy the outstanding principal
balance on loan No. 10398/100160. The record is silent with
regard to the application of the remaining $10,677. Also, on
December 18, 1985, a $125,000 unsecured line of credit was
established between the bank and petitioner with loan No.
10398/105886.
5The number preceding the slash identifies the customer, and
the number following the slash identifies the specific loan.
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