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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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