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of the partnership, which Mr. Palermo defined as "The management
of the partnership; the financial obligations; the management of
the partnership; basically taking over his partnership interest."
Mr. Palermo admitted during his testimony that there was never
any written release, and he did not recall any oral release, of
Mr. McDaniel from the obligations of Second Street. Consis-
tently, Mr. Palermo gave the following testimony about the Second
Street loan:
I don't think that ever came up as a specific topic.
Our relationship was very informal. And I looked at
this as an opportunity to obtain a larger interest in
the partnership, which would allow me to manage it
better.
Inconsistently, Mr. Palermo further testified that he did not
expect Mr. McDaniel to pay any obligations concerning the part-
nership.
We are not persuaded from the testimony of Mr. McDaniel and
Mr. Palermo (1) that during 1992 Mr. Palermo agreed, either
orally or in writing, to assume Mr. McDaniel's liability as a
guarantor of the Second Street loan and (2) that either Mr.
McDaniel or Mr. Palermo believed that Mr. McDaniel was in fact
discharged from that liability. In this regard, it is signifi-
cant that other general partners of Second Street who terminated
their respective interests in that partnership during the mid-to-
late 1980's received express releases by the partnership's
creditors from any liability for the obligations of the part-
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