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FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
At the time the petitions were filed, Khalaf’s residence was
located in New Mexico.
Al Zuni was incorporated in 1976 as an Arizona corporation
engaged in the business of buying and selling Native American
jewelry.
Since the early 1980's, Khalaf was the sole shareholder of
Al Zuni. From 1976 and through the years in issue, Khalaf
traveled throughout the Southwestern United States purchasing and
reselling on behalf of Al Zuni Native American jewelry.
Native Americans who live on reservations and who make and
sell jewelry often do not have easy access to banks and typically
would sell jewelry to Khalaf only for cash. Thus, over the
years, Khalaf purchased for cash the items of jewelry that were
added to Al Zuni’s jewelry inventory.
In September of 1992, on Al Zuni’s books and records there
was recorded a debt obligation of Al Zuni to Khalaf in the amount
of $196,510.
In mid-September of 1992, a transaction was entered into
between Al Zuni and Khalaf in which Al Zuni transferred to Khalaf
all of its then extant jewelry inventory.
In minutes of a special meeting of Al Zuni's board of
directors that was held on September 15, 1992, the transfer of a
portion of Al Zuni's jewelry inventory to Khalaf is described as
a transfer in payment of Al Zuni's above-mentioned $196,510 debt
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