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Palermo was assuming the existing obligations of the partner-
ship." However, petitioners assert that "the bank knew Palermo
was shouldering the obligation to pay the partnership obligations
after McDaniels [sic] removed himself from the partnership." In
support of their position, petitioners point, inter alia, to
several of the written internal reports, including those dated
June 1992, December 1992, June 1993, and July 1993. Respondent
contends that there is "no evidence that the bank was aware on
[sic] any discharge of petitioners' liability in 1993."
We agree with respondent. Although petitioners are correct
that the Bank knew in 1993 that Mr. Palermo was "shouldering the
obligation to pay" the 1989 note, that fact does not establish
knowledge on the part of NationsBank/Amresco that Mr. Palermo
assumed Mr. McDaniel's partnership obligations. Nor do the
written internal reports show that the Bank was aware of any
agreement by Mr. Palermo to assume Mr. McDaniel's partnership
obligations. To the contrary, those reports, and the testimony
of Mr. Martens, who was responsible for the management of the
Second Street loan during most of 1993 and during 1994 until it
was paid off in October 1994, establish that NationsBank/Amresco
did not release Mr. McDaniel from his guaranty of that loan. In
addition, when questioned about whether the Bank officials were
aware of his agreement with Mr. McDaniel, Mr. Palermo testified:
"I believe that, through the process of the Parker bankruptcy and
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