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On July 1, 1988, Pacer entered into a written agreement (the
asset sale agreement) to sell all of its assets to Venco for
$598,500, payable in installments corresponding to the amounts
specified in the settlement agreement. The asset sale agreement
states that Pacer agrees to allow Venco, should Venco deem it
economically necessary, to resell the equipment, “with the
understanding that in the event of such sale all proceeds derived
from said sale shall be tendered to Pacer Industries” for
distribution to its creditors holding security interests in the
equipment. The asset sale agreement recites that Venco
“understands and accepts the fact that * * * [Pacer] contemplates
the cessation of all business operations, and the potential of
filing for protection under the Bankruptcy Code of the United
States of America.”
Venco never made any payments for the Pacer equipment. On
September 10, 1988, Venco executed a written bill of sale
transferring the equipment to petitioner for consideration of $10
and “other good and valuable consideration”. The bill of sale
states:
Said sale is subject to all liens of record, security
interest, and other encumbrances of record as identified in
the Asset Sales Agreement where Venco, Inc. obtained title
dated July 1, 1988.
Cloud’s liability to Venco shall be limited for
assumption of the debt outstanding on this property to
the lesser of, the outstanding payments due as shown on
the Asset Sale Agreement or ONE HUNDRED AND SIXTY-FIVE
THOUSAND DOLLARS AND 00/100 ($165,000.00) and no more.
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Last modified: May 25, 2011