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sham, and petitioner received the stock of 2618 Inc not by purchase,
but in payment and in satisfaction of the over $500,000 in legal fees
owed to him by 2618 Inc and by Helmle.
During 1986 through 1988, in correspondence to various
individuals, petitioner made statements regarding the value of the
stock of 2618 Inc and of the Club. The following schedule summarizes
petitioner's statements:
Date Description
09/19/86 Letter to hearing officer for City of Houston in which petitioner
stated that the market value of the Club was between $1 million and
$1.5 million.
02/11/87 Letter to loan officer for TexGuarantyBk in which petitioner stated
that the Club could be sold for $1.5 million.
06/05/87 Letter to district judge for Harris County, Texas, in which petitioner
stated that the market value of the Club was between $1 million and
$1.5 million.
11/17/87 Letter to Kalantzakis in which petitioner stated that a 50-percent
stock interest in 2618 Inc had a value of over $700,000 and that an
individual had offered to purchase the Club for $1 million.
02/29/88 Letter to Helmle in which petitioner stated that an offer had been
received to purchase a 50-percent stock interest in 2618 Inc for
$600,000.
Relief as Guarantor of $705,000 Debt Obligation
On March 14, 1985, Payne & Potter borrowed $705,000 from Texas
Commerce Bank in Houston (TexCommBk) to develop four luxury
condominium units on a golf course in Lakeway, Texas. Petitioner was
shown on the loan documentation as guarantor of this $705,000 loan.
By 1987, apparently because of the declining regional real
estate market, Payne & Potter defaulted on its $705,000 debt
obligation to TexCommBk. During 1987 and 1988, petitioner made
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