Investment Research Associates - Page 475




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          interest it would eventually obtain at a price insignificant in              
          comparison to the purported original purchase price.  Thus, no               
          substantive residual value was extant.                                       
               IRA presented no evidence of fair market value, residual                
          value, or useful life regarding this equipment, other than the               
          original purchase prices.  The recourse obligations with respect             
          to the liability of IRA were determined as of the date of                    
          occurrence of a default pursuant to attached schedules which                 
          stated that the maximum amount of personal liability was zero.               
          Moreover, to the extent that any payments of IRA were deferred               
          because a default in the lease rentals to IRA, such deferred                 
          amounts were not subject to recourse liability.  Thus, there was             
          no real recourse against IRA.  The obligations of Funding to                 
          Carena were nonrecourse.  Cedilla Invest./IRA did not assume the             
          obligations.  IRA's purported purchase was subject to the rights             
          of prior lienholders, lessees, and the rights of Atlantic.                   
               The lease between Cedilla Invest. and Funding International             
          ended on December 31, 1988.  As of January 1986, the equipment               
          used in this transaction, i.e., the IBM mainframe computers,                 
          model Nos. 3031 and 3032, was no longer listed in the computer               
          price guide, which is the bluebook of used IBM computer prices.              
          This would indicate that the residual value of the equipment as              
          of that date was zero.                                                       








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