Melvyn L. Bell - Page 7

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          to advance to BEI and TELCOR after consulting with officers of              
          the companies about the subsidiaries' financial needs.  At times,           
          petitioner also sold ENSCO stock and transferred some of the sale           
          proceeds to BEI to cover operating expenses of the subsidiaries.            
          Petitioner also personally guaranteed loans from third-party                
          lenders to BEI, TELCOR, and the subsidiaries.                               
               Officers of BEI and its subsidiaries met with petitioner's             
          lending banks to discuss his personal banking and credit                    
          positions to ensure that BEI and TELCOR would continue to receive           
          financing through petitioner.  Petitioner's personal banking                
          relationships were also discussed at BEI's board of directors               
          meetings.                                                                   
               Petitioner did not receive collateral for the advances that            
          he made to BEI or TELCOR.  Almost 1 year after petitioner                   
          provided the first advance, he received a series of notes,                  
          payable on demand, from BEI, TELCOR, and TELCOR's subsidiaries              
          reflecting the prior advances.  He did not receive any notes                
          directly from any of BEI's other subsidiaries.  On October 31,              
          1987, petitioner received a promissory note from BEI for                    
          approximately $6.4 million.  Petitioner also received a note from           
          TELCOR for $250,000 on October 31, 1987, and three notes directly           
          from subsidiaries of TELCOR for a total of approximately $1.3               
          million; two notes were dated October 31, 1987, and one was dated           
          February 20, 1987.  The notes were for the amounts that                     
          petitioner had previously advanced to the companies.  The notes             



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