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price sufficient to allow a borrower to discharge all of his
debt"; (8) Mr. Kersting's statements in a credit-reference letter
written on behalf of a program participant; and (9) a form letter
issued to test case petitioner Jerry R. Dixon describing the
process for the termination of his participation in a stock
purchase plan. See id. at 1499-1500, 1991 T.C.M. (RIA), at 91-
3043 to 91-3044.
Continuing his analysis, Judge Goffe concluded that, even
assuming that there was no prearranged understanding between
Mr. Kersting and program participants, neither Mr. Kersting nor
the program participants ever contemplated that the principal
obligation on a primary loan would be paid except by a surrender
of the underlying stock. Judge Goffe reached this conclusion
after finding that: (1) No evidence was produced of a primary
note ending up in the hands of anyone not associated with
Mr. Kersting; (2) primary loans issued during later years
included an express notation that they were nonnegotiable and
nonassignable; and (3) primary loans were unsecured, with the
primary notes failing to list even the purchased stock as
collateral. See id. at 1500, 1991 T.C.M. (RIA), at 91-3044.
Judge Goffe further concluded that program participants would not
have assumed liability for the high level of debt that the
primary loans represented, considering their lack of
understanding of the Kersting corporations in which they were
purportedly investing, "unless they had no expectation or
intention of ever paying off those loans with cash". Id.
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