- 22 -
pay LTI interest quarterly at a rate equal to ABN Bank's U.S.
prime rate plus 2 percent.
On October 14, 1986, LWSI bought all of the stock of GSX
from GSX's parent for $349,812,613. On October 14, 1986, the GSX
purchase escrow disbursed $349,812,613 to GSX's parent and gave
the three LWSI promissory notes to LTI. After the GSX sale, LTI
owed LTL $349,812,613 (which was unsecured) with interest at a
rate equal to the U.S. prime rate.
On October 20, 1986, LWSI's $124,812,613 promissory note was
assigned to LTL, then to Transit, then to LIL, and then to LIIBV.
In exchange for this assignment, LIIBV executed a promissory note
to LIL for an interest-free loan from LIL in the same amount as
the assigned note. On November 10, 1986, LWSI's $125 million
promissory note was assigned to LIIBV. Haworth and Cairns signed
the documents through which the notes were assigned.
On December 10, 1986, LWSI told LIIBV that LWSI could not
lower its debt to equity ratios to a level acceptable to ABN Bank
by issuing equity. This was partly because the equity market was
weak at that time.
LIIBV transferred to LWSI $21 million on February 18, 1987,
and $79 million on June 15, 1987. LWSI used these funds to repay
LTI for the $100 million promissory note.
Initially LTL, and later LIIBV, financed LWSI's acquisition
of GSX. As part of that initial financing LTL and LIIBV required
LWSI to pay interest at a rate of 10.5 percent on the amount
Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 NextLast modified: May 25, 2011