- 39 -
Petitioners contend that the foregoing withdrawals subse-
quent to the expiration of the 45-day period after July 26, 1990,
and prior to the expiration of the 180-day period after that date
were permissible under paragraph 5(d)(1) of the escrow
agreement.11 That is because, according to petitioners, that
paragraph "could reasonably be interpreted" to permit Mr.
Hefferan as Interstate's trustee to disburse any funds that were
not necessary to acquire replacement property to OIP at its
election after the expiration of 45 days after July 26, 1990. We
disagree and reject petitioners' construction of paragraph
5(d)(1) of the escrow agreement as an unreasonable interpretation
of that paragraph. Paragraph 5(d)(1) of the escrow agreement
provided:
(d) Disposition of Funds If Some or All Like Kind
Properties Are Not Acquired. In the event that the non
simultaneous like kind exchange of the Exchange Prop-
erty contemplated hereunder is not consummated in whole
or in part in accordance with the provisions of this
paragraph 5, Buyer and Exchangor agree that the Escrow
Agent shall distribute the Escrow Fund as follows:
10(...continued)
"Agreed Amount" as defined in paragraph 5(e) of the escrow
agreement), Interstate did not comply with that requirement with
respect to at least three of the four replacement properties that
were ultimately purchased by OIP with a portion of the escrow
fund. Instead, OIP acquired at least those three properties
through preexisting contracts in its own name or without any
contract at all.
11Petitioners do not address the withdrawal of $29,311.83 on
July 27, 1990, before the expiration of the 45-day period after
July 26, 1990, that was supposed to have been, but was not, used
to purchase the Brentwood property.
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