- 5 - The collapse of the gold-dredging venture and the transfer of the Theratech stock to petitioner in 1982 placed Estes in financial trouble. Expecting Estes to repay his debt to petitioner by selling the Theratech stock, petitioner placed the stock in a joint account that he opened with Estes at a local securities brokerage. Petitioner and Estes sold the shares in small amounts to maximize its sale value. Although petitioner knew that Estes was experiencing financial difficulty, petitioner believed that once the Theratech device became a financial success, Estes would be able to repay the amount petitioner had lent him. Accordingly, rather than attempting to collect the outstanding loan amounts, petitioner advanced Estes additional sums, for which Estes signed promissory notes. Estes signed promissory notes for $52,381 on December 8, 1982; $12,534 on August 10, 1983; $5,000 on July 13, 1984; $4,000 on August 2, 1984; $2,000 on October 18, 1984; $3,135 on April 2, 1985; $300 on April 26, 1985; and $3,000 on June 28, 1985. Whenever petitioner advanced sums to Estes, petitioner or his secretary made a photocopy of the check for his records. Petitioner provided these additional amounts because he thought he needed Estes to promote the Theratech device. Estes used the money for living expenses. Although these additional advances were evidenced by promissory notes signed by Estes and were payable on demand, onlyPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011