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for the prior few days were withdrawn from the separate bank
accounts maintained by each restaurant and were transferred into
a single bank account maintained at Commerce Bank under the name
of Square Pan. This bank account will be referred to hereinafter
as the Intercompany bank account.
All of the business expenses relating to Peoplefeeders, to
Square Pan, to the related subsidiaries, as well as all of the
business expenses relating to the restaurants owned and operated
by the various related corporate entities, were paid by checks
drawn not on the separate bank accounts maintained by each
restaurant, but by checks drawn on the Intercompany bank account.
Payments made to Motsenbocker and to Commerce Bank with regard to
Peoplefeeders' loan and debt obligations described above also
were made by checks drawn on the Intercompany bank account.
For the years in issue, total cash receipts that
Peoplefeeders received and transferred into the Intercompany bank
account were sufficient in amount to cover Peoplefeeders' total
operating expenses, but they were not sufficient to cover the
loan payments Peoplefeeders owed to Motsenbocker and to Commerce
Bank. Accordingly, the difference between the total cash
receipts transferred by Peoplefeeders into the Intercompany bank
account and the total of Peoplefeeders’ expenses and loan
payments that were paid out of the Intercompany bank account
increased each year from 1987 until May 1992, as follows:
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Last modified: May 25, 2011