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$3.3 million and $3.7 million, on July 30, 1992, and November 27,
1992, respectively.
On December 1, 1992, petitioners reached an agreement with
Kramer and Bremberg which provided that Friedman would acquire
all interest in Kramer's holdings in New Manchester. At the same
time, Rosenthal would acquire Bremberg's interest in New
Manchester. Before December 31, 1992, in accordance with the
aforementioned agreement, petitioners became the sole
shareholders of New Manchester, each, respectively, owning 50
percent of New Manchester.
On December 10, 1992, a proceeding was begun in bankruptcy
court to examine allegations by certain creditors that there were
"potential fraudulent conveyances and/or preferential transfers
with respect to [New Manchester]" prior to the filing of the
petition for bankruptcy. The creditors further alleged that, in
connection with a prior leveraged buy-out of New Manchester,
petitioners rendered New Manchester insolvent or
undercapitalized.
On January 4, 1993, the bankruptcy court amended its order,
dated July 29, 1992, and authorized the trustee to pay an
additional $177,000 to NMB to apply against its secured claim.
Subsequently, on March 22, 1994, the bankruptcy court authorized
the trustee to pay $684,635.75 to an assignee of NMB.
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