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transferred into the Intercompany bank account from Peoplefeeders
were never treated or specifically labeled in Peoplefeeders’ or
in Square Pan’s books and records as repayments of a loan from
Square Pan.
Also, as discussed further below, not until 1992 was the
difference between the total of the cash receipts transferred by
Peoplefeeders into the Intercompany bank account and the total of
the expenses and loan payments paid on behalf of Peoplefeeders
out of the Intercompany bank account treated in the minutes of
Peoplefeeders’ board of directors meetings as a loan to
Peoplefeeders. That difference was never reflected by a written
promissory note from Peoplefeeders in favor of Square Pan. No
interest was ever charged to Peoplefeeders with regard to that
difference. That difference was never treated or specifically
labeled in Peoplefeeders’ or in Square Pan’s Intercompany general
ledger accounts as a loan or as a discrete credit balance.
Private Placement Memorandum, 1991 Sale of Restaurants, and
1992 Board of Directors' Meeting
In 1988, Partrick attempted unsuccessfully to sell the stock
in Peoplefeeders through a private placement. In the related
private placement memorandum, no indication or disclosure was
made of any debt or loan obligation owed by Peoplefeeders to
Square Pan or to the other related entities.
Over the course of 1987 through 1991, the majority of the
Square Pan Pizza restaurants was either sold or closed. In
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Last modified: May 25, 2011