Charles A. Greene and Christine J. Greene - Page 8

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               Through Corman, petitioner knew other individuals who were             
          investors in Mid Continent.  Before investing in the partnership            
          in 1983, petitioner discussed with other investors the nature of            
          "their involvement with Mid Continent".  Petitioner "looked into"           
          the activities of the partnership in 1981 and 1982 by reading               
          accounting reports.  On the basis of the discussions with other             
          investors and the recommendations of Corman, petitioner                     
          considered the purchase of Fields' interest in the partnership to           
          be "reasonable".                                                            
               The Deal With Fields                                                   
               When Fields invested in the Mid Continent partnership in               
          1981, he agreed to make an initial cash payment of $10,000 and to           
          make subsequent $10,000 cash payments in each of the years 1982             
          and 1983.  Fields also agreed to become liable on a $120,000                
          "obligation" to Mitchell Petroleum Technology Corp. (Mitchell)              
          that was to become due 13 years later, on January 15, 1994.                 
          During  petitioner's negotiation with Fields over the purchase of           
          his Mid Continent partnership interest, it was agreed from the              
          beginning that petitioner would pay the last $10,000 cash capital           
          contribution.  But the negotiation focused on "What the amount of           
          the investment was that we were to receive in terms of the value            
          of the balance of the due--the amount that was still due" on                
          Fields' obligation to Mitchell.  They discussed whether Fields              

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