Investment Research Associates - Page 578




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                    The entire second installment payment to the                      
               selling partners was $750,000.00.  Your allocable share                
               of the transaction was 17.5 percent, thus equaling the                 
               $131,250.00.                                                           
               From 1984 through 1987, the Frey partnership paid a total of           
          $403,954 to Holding Co. ($113,827 in 1984, $256,557 in 1985, and            
          $33,570 in 1987).  Of the $113,827 paid in 1984, $98,437 was                
          identified as a distribution and $25,391 as Holding Co.'s share             
          of fees.  Of the $256,557 paid in 1985, $197,757 was Holding                
          Co.'s share of proceeds from the sale of the additional                     
          partnership interest to TSG Holdings, $55,950 as a distribution,            
          and $2,850 represented participation in developers' fees.                   
          C.   The Schaffel Arrangement: Real Estate Construction and                 
          Financing                                                                   
               Schaffel was a mortgage broker and a real estate developer.            
          In the summer of 1979, Kanter invited Schaffel to dinner at a New           
          York City restaurant to discuss a business proposition.  He told            
          Schaffel that Ballard and Lisle would also be joining them for              
          dinner.  Schaffel accepted Kanter's invitation.  In addition to             
          learning more about the potential business opportunity that                 
          Kanter had mentioned, Schaffel was eager to meet and socialize              
          with Ballard and Lisle, as he knew that they were senior                    
          Prudential real estate executives.                                          
               During the dinner, Kanter asked whether Schaffel would be              
          interested in arranging the financing for a casino hotel to be              
          built in Atlantic City, New Jersey.  Prudential was not involved            






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