Robert A. Read - Page 6

                                        - 6 -                                         
          collateral for the loan.  On February 27, 1989, Security informed           
          petitioner by letter that on February 2, 1989, the Security loan            
          had matured and the bank was unable to further extend it.  The              
          letter stated that the Security loan had not been paid, requested           
          payment, and stated that if payment was not made, the bank would            
          “be compelled to pay off the loans out of the various                       
          certificates of deposit which are pledged to secure the loans.”             
          Security used the certificate of deposit to pay off the Security            
          note sometime after February 27, 1989.                                      
               Guaranty Agreement                                                     
               After the transfer of its interest in the Sheraton Hotel to            
          Mr. Grossman, VIP had no assets other than the replacement note.            
          VIP would not have been able to secure the Security loan without            
          posting adequate collateral.  Petitioner's certificate of deposit           
          was taken to pay not only the Security note but also two other              
          loans, that of petitioner and of Gemini Management.                         
               Worthlessness:  Year and Existence                                     
               Petitioner expected that payments from the replacement note            
          would allow him to pay off the Security note.  Although the                 
          maturity date of the replacement note was September 15, 1986,               
          petitioner believed that Mr. Grossman was going to pay it within            
          30 days of the issuance date, in January of 1986.  In January of            
          1986, Security told petitioner that the Security note had not               
          been paid.  During 1986, petitioner pursued Mr. Grossman on a               
          regular basis to pay the replacement note; he called Mr. Grossman           

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  Next

Last modified: May 25, 2011