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will likely refinance the loan and take it back into
their portfolio, once Parker has been removed from the
relationship.
Written internal reports dated December 31, 1993, and June
30, 1994, that were prepared by Mr. Martens continued to list Mr.
McDaniel and Ms. McDaniel as guarantors of the Second Street
loan, indicated that Mr. McDaniel was no longer a partner in
Second Street, and contained financial analyses of Mr. McDaniel
and Ms. McDaniel based on the most recent statements that they
provided to the Bank. In the written internal report dated
December 31, 1993, Mr. Martens stated that Mr. Palermo "continues
to pay interest on the matured note and has agreed to pay all
delinquent real estate taxes upon renewal of the loan." As was
true of the written internal reports dated June 1992, December
1992, June 1993, and December 31, 1993, the written internal
report dated June 30, 1994, discloses that the Bank was eval-
uating petitioners' assets as a possible collection source.
Throughout the duration of the Second Street loan, Nations-
Bank/Amresco affirmatively decided not to, and did not, discharge
Mr. McDaniel from his liability to the Bank as a guarantor of
that loan.
After having waited for about a year in order to permit Mr.
Parker's bankruptcy matter to be resolved, and it having been
resolved in early 1994, the Bank finally lost patience with
respect to the Second Street loan. On April 21, 1994, Mr.
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