Earl E. Cloud, Jr. and Sheila S. Cloud - Page 5




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          liquidation, were believed to be worth less than the obligations            
          that Pacer owed NAC.  The settlement agreement states:                      
               Pacer is presently selling its assets to Venco for an agreed           
               upon purchase price of $614,000.  Such purchase price is to            
               be paid in monthly installments * * *. Pacer shall retain a            
               Security Interest in its assets as sold to Venco until Venco           
               has made payment in full of such purchase price, plus                  
               interest.  The purchase of the assets by Venco is subject to           
               the existing liens and security interest in or covering such           
               assets * * *.                                                          
               Under the settlement agreement, Venco’s monthly installment            
          payments for Pacer’s assets were required to be paid to the                 
          various creditors involved in the lawsuit.  The settlement                  
          agreement specifies the amounts of the monthly installment                  
          payments and the manner in which they are to be divided among the           
          creditors.  The settlement agreement also provides that                     
          petitioner will not be released from his personal obligations               
          until the various creditors have received payments totaling at              
          least $162,735.2  Under the settlement agreement, in the event a            
          default occurred in the payment of any payment from Venco, NAC              
          was entitled to file a previously executed consent judgment in              
          favor of NAC and against Pacer and petitioners for the sum of               
          their debts to NAC.                                                         




               2 This total comprises required installment payments                   
          totaling $36,920 to NAC and installment payments totaling $24,494           
          to the State of Alabama Department of Economic and Community                
          Affairs, as well as satisfaction in full of petitioner’s $101,321           
          Federal tax liability.                                                      





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