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that payments Murray Company (MC), an unrelated entity, made to
KBI to decrease the amount outstanding on KBI's loan to Mr.
Solaas and KBI's repayments to MC a few days later (the MC
transactions) mulcted banks and bonding companies by
misrepresenting KBI's financial status. Respondent points to the
following: (1) MC made all of its payments to KBI just before
Steven Wright, KBI's accountant, prepared KBI's financial
statements and midyear reports; (2) KBI used the financial
statements and midyear reports to gain lines of credit from banks
and to obtain bonding for its construction work; and (3) the MC
transactions reduced the amount of debt listed on the financial
statements and midyear reports as due from Mr. Solaas and
increased the amount of stated cash on hand shown on the
financial statement.
We are not persuaded by respondent's argument. First, MC
was an independent, unrelated third party. Respondent presented
no evidence that Mr. Solaas or KBI controlled, or was in any way
involved with (other than in the MC transactions), MC. Second,
the MC transactions were not transfers KBI made to Mr. Solaas;
the loans are the alleged transfers KBI made to Mr. Solaas. Mr.
Solaas personally never received any money from KBI or MC from
the MC transactions. Respondent has produced no persuasive
evidence that KBI loaned money to Mr. Solaas with the intent to
defraud any of KBI's creditors.
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