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percent. As a result, Eastern Oklahoma had voting control of
Adult Living Centers.
Phoenix Federal arranged for a $3,150,000 loan from State
Federal Savings & Loan Association (State Federal) to finance the
construction of the Van Orden project. A tax-exempt bond
facility provided funding for the loan. Phoenix Federal also
arranged for a takeout commitment from State Federal. The
takeout commitment provided that, subject to certain conditions,
State Federal would provide funding to pay off the tax-exempt
bond facility in the event of a mandatory bond redemption or upon
final maturity of the bond issue.
At the March 17, 1983, closing of the State Federal loan, a
dispute arose as to whether Adult Living Centers' shareholders,
including petitioner, were required to guarantee the loans made
to Adult Living Centers. Although petitioner stated his
objections, he did sign a guaranty of collection for a
proportionate amount of the $3,150,000 State Federal loan (State
Federal loan guaranty) and a guaranty of payment for a
proportionate amount of the commitment fee required by the State
Federal takeout commitment (State Federal takeout guaranty). The
amounts petitioner guaranteed were based on his proportionate
stock ownership in Adult Living Centers.
Several competing nursing home operators objected to the Van
Orden project and closely monitored the project. In May 1983,
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