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general assignment of rents were entered into between Del
Commercial and Del Netherlands.
Also as security for the $14 million Royal Bank loan, Del
Commercial executed a document labeled "Undertaking" which
reflected Del Commercial’s obligation to allow Royal Bank to
place a mortgage on Del Commercial’s real property located in the
United States, and it required Del Commercial to provide to Royal
Bank annual financial statements, to insure its real property, to
assign the insurance policies to Royal Bank, to defer paying
dividends to shareholders, and to pay to Royal Bank on the $14
million Royal Bank loan proceeds from sale of any of Del
Commercial’s real property.
On January 1, 1991, Del Commercial began making payments on
the $14 million loan Del Commercial purportedly had received from
Del Netherlands. In each year from 1991 to 1993, Del Commercial
made the following total payments on the $14 million loan it had
received:
Year Principal Interest Total Payments
1991 $ 28,062 $ 881,938 $ 910,000
1992 442,329 3,153,283 3,595,612
1993 866,998 1,683,002 2,550,000
Del Commercial and Del Netherlands recorded the loan payments on
their respective books and records as having been made by Del
Commercial to Del Netherlands.
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Last modified: May 25, 2011