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a breach-of-contract suit that he had lost at the trial level.
In order to carry out these plans, on August 7, 1981, Robert,
bought all the stock of Lincoln American Securities, Inc.
(hereinafter sometimes referred to as Lincoln Securities), for
$65,000, with $25,000 due at the closing and the balance, with
interest, payable in three equal annual installments, which
Robert personally guaranteed.13 A check drawn on SSI's Gradison
Cash Reserves account paid the $25,000 that was due at the
closing. The notation "R. Iles personal draw" was on the check.
On August 10, 1981, Robert and Lincoln Securities executed
three stay-of-execution bonds for the appeal in the above-noted
litigation. The bonds totaled $176,500. Lincoln Securities was
surety on all three bonds. After the execution of the three
appeal bonds, it was discovered that Lincoln Securities did not
have enough capital to act as surety on the bonds. On December
17, 1981, $176,500 was withdrawn from the FE Trust's Southern
Ohio Bank account and shortly thereafter was placed in an
interest-bearing escrow account in Robert's name in the same bank
to fund Robert's appeal bonds. See supra D. Free Enterprise
Trust. In a net worth statement that petitioners submitted in
connection with a 1983 loan application, petitioners listed the
13 The preamble of the Agreement of Acquisition shows the
buyer as "Lincoln American Holding Company" but it is clear from
the rest of that document and from other documents that both
Robert and Lincoln Securities' seller considered Robert to be the
buyer. See infra table 1.
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