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for more than an insubstantial amount ($27,949).55 In this
regard, he testified how he determined the note's stated purchase
price:
[Petitioner's counsel]: * * * With respect to [the]
Victorian Village [note] * * *, please tell the Court why
that was sold for $27,949 and a loss of $283,929 was taken?
Would you please tell the Court why you would have sold this
note at such a substantial discount?
[Kanter]: Well, at the time, it was my judgment it was
worth no more that the amount that was received. This was a
real estate timeshare project out West. We thought that it
could run very successfully and the units in it were sold on
a timeshare basis effectively.
That did not turn out to be the case, and despite a
series of efforts at refinancing, one of which took place
and the others which did not, the property was at a point--I
55
The Court finds Kanter's arguments with respect to the bona
fides of this transaction and other transactions with MAF
inconsistent and, at times, contradictory. For instance, in
proposed findings on the Victorian Village note transaction,
Kanter, in his opening brief, acknowledges Morrison's (MAF's
president) testimony that MAF purchased various assets from
Kanter as "an accommodation". Yet, on reply brief, he asserts
somewhat differently that Morrison's testimony did not
necessarily refer specifically to the Victorian Village note
transaction. His testimony, it is now asserted, pertained only
to those notes for which MAF "paid" $1. It is argued that "He
did not testify that collectibility of the Victorian Village note
was not a concern * * * [to him] or MAF. Considering the size of
MAF's investment, $27,949, it would be unreasonable to assume, in
the absence of explicit testimony, that collectibility was not an
issue to MAF when acquiring the Victorian Village note." The
Court notes that there was ample opportunity, during the trial,
to clarify Morrison's testimony on this point. No attempt was
made to ask Morrison whether he had examined and inquired into
the Victorian Village note's collectibility. Considering the
fact the Morrison received no compensation for being MAF's
president, the Court does not believe that he did make such an
examination or inquiry. The Court has determined in its findings
that Morrison and MAF failed to examine and consider the
collectibility of the notes "purchased" from Kanter.
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