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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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