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relating to Monroe's purchase of rolling stock ($4 million). In
October 1990, LTI sold Monroe, renamed Laidlaw Tree Services,
Inc., to an unrelated party for $17.4 million. At that time, LTI
assumed Tree's obligation to repay $22.5 million to LIIBV, and
Tree agreed to pay $22.5 million to LTI.
4. General Terms and Conditions of the LIIBV Agreements
LTL's counsel, Cairns, wrote the first draft of all of
the LIIBV loan agreements. LIIBV and petitioners
revised some of the agreements.
The loan agreements and promissory notes between LIIBV,
Transit, LWSI, Tree, and LTI and LII as guarantors: (a) Said
that the borrower unconditionally promised to repay advances on a
fixed date or on demand; (b) said that LTI guaranteed LIIBV that
Transit and Tree would repay the advances, and LII guaranteed
LIIBV that LWSI would repay the advances; (c) said that the
borrower must pay a fixed or determinable rate of interest
regardless of whether the borrower or guarantor had any income or
distributed dividends; (d) said that LIIBV could require the
borrower and the guarantor to pay principal and interest; (e)
said that LIIBV's rights were senior to the rights of the equity
holders of the nominal borrower and guarantor; (f) did not
authorize LIIBV to convert the obligations into stock of the
nominal borrower or the guarantor; (g) did not authorize LIIBV to
participate in the management of the nominal borrower or the
guarantor; (h) did not say that the nominal borrower's obligation
to repay LIIBV was contingent; and (i) said that LIIBV could
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