Stephen F. Scofield and Nancy E. Scofield - Page 9

          bank, without the approval of Northeast or knowledge of                     
          petitioner, let McKee borrow money in Northeast's name that McKee           
          used for highly speculative investments unauthorized by Northeast           
          and for McKee's personal benefit.  He also claimed that McKee and           
          one of the bank's officers intentionally misrepresented                     
          Northeast's financial condition to induce petitioner to sign the            
          guaranty to the bank, and he sought indemnification from McKee              
          and the bank officer.                                                       
               Petitioner initially contended during the Northeast                    
          litigation that he had not guaranteed Northeast's indebtedness to           
          the bank and that he was not liable for payment on the guaranty.            
          However, in 1984, petitioner acknowledged that he had signed the            
          guaranty in January 1980 and was liable to the bank for payment             
          on the guaranty.                                                            
               Robert Williams represented petitioner in the Northeast                
          litigation.  These cases were settled in 1988.  See paragraph I-            
          E-3, below.                                                                 
               2.   Petitioner's Bankruptcy Case                                      
               In September 1983, petitioner filed a petition in the United           
          States Bankruptcy Court for the District of New Hampshire under             
          chapter 7 of the U.S. Bankruptcy Code, seeking a discharge of all           
          of his debts.  On the schedules filed with the Bankruptcy Court,            
          petitioner listed personal property having a value of $7,000 and            
          no real property.  Petitioner listed the following debts in his             
          bankruptcy petition:  (a) Warner & Stackpole ($7,000); (b)                  

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