- 23 -
year, times 15 years, times the hourly rates of $15 and $8 per
hour). During this period, the children owned from 50 percent to
95.32 percent of the land constituting the family farm. In
addition, decedent was, of course, the children's mother.
Land Bank Loan
On September 23, 1980, Garry's estate agreed to borrow
$950,000 from the Federal Land Bank of Louisville, Kentucky (the
Land Bank). The promissory note representing this loan (the Land
Bank loan) provided that the following parties were jointly and
severally liable for repayment of the loan: (1) Decedent, on
behalf of Garry's estate; (2) decedent, individually; (3) the
children; and (4) the children's spouses. Repayment of the Land
Bank loan was secured by a mortgage of most (but not all) of the
1,804 acres constituting the family farm.
During 1979-93, approximately $1.5 million in interest and
principal was paid on the Land Bank loan. This amount was paid
from the three bank accounts used by Garry's estate, into which
decedent's investment income was also deposited.
Use of Land Bank Loan Proceeds
Of the $950,000 principal amount of the Land Bank loan,
$58,734 was expended on a mandatory purchase of Land Bank stock
and other closing costs and fees, leaving net proceeds of
$891,266.
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