Robert C. Coborn, Sr. - Page 6

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          prospects good, and petitioner anticipated the possible private             
          or public sale of the stock of EPL.                                         
               In 1988, no appraisals relating to the value of EPL as a               
          business were obtained.                                                     
               The evidence does not indicate that petitioner ever made               
          demand on EPL for repayment of his purported loans to EPL, nor              
          does the evidence indicate that petitioner ever undertook steps             
          to otherwise collect from EPL the purported loans.                          
               In 1988, in anticipation of, among other things, a possible            
          sale of EPL’s stock and in an effort to enhance the financial               
          statements of EPL, petitioner went through the exercise of                  
          “forgiving” $1.6 million in purported debt of EPL to petitioner             
          relating to funds that petitioner over the years had transferred            
          to EPL.                                                                     
               After 1988, EPL continued to operate as a business.                    
          Petitioner and his son attempted to sell the stock of EPL in a              
          public offering, and petitioner continued to transfer funds to              
          EPL.  In 1989, 1990, and 1991, petitioner transferred to EPL                
          funds totaling $616,169, and petitioner received from EPL funds             
          totaling $573,282.  The evidence does not indicate the existence            
          of any promissory notes or other debt instruments relating to the           
          funds that petitioner, after 1988, transferred to EPL.                      
               In 1989, in seeking outside investment capital, a new                  
          comprehensive business plan for EPL was adopted.                            





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