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Your question is Will UCC be required to pay the
escrow account back for this excess draw?
According to the terms of the agreement, I suppose
that technically you would have to do this.
However, since W&H does have knowledge that these
transfers are taking place, we currently have no
objection to this in light of our hope that we can
overcome the deficits. W&H would not request UCC to
repay any overdraws unless we objected to a specific
draw at the time it was taken or in the event that UCC
would unreasonably interfere with W&H’s efforts to
continue the mailing campaign to recover the deficits.
The worst thing that could happen is that should
the deficits continue to grow or can not be reduced,
and if UCC substantially overdraws its 50% program
allocation, it could become necessary to reduce the
draws to bring them back into balance.
Should we determine this situation to be
developing, I would like for us to sit down well in
advance of such time and create plans so that a
reduction would not adversely impact UCC’s operation.
After reviewing Watson’s October 23, 1986, letter, petitioner’s
executive committee and executive director concluded that the
letter was not satisfactory for petitioner’s purposes and did not
relieve petitioner from having full recourse liability with
respect to excess draws.
Petitioner’s executive committee asked petitioner’s
executive director “to contact * * * Watson to ask that he
rewrite it [i.e., the October 23, 1986, letter] in time for our
auditors review.”
Watson sent a new letter to petitioner’s executive director
on November 19, 1986. The November 19, 1986, letter is
substantially the same as the October 23, 1986, letter, except as
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