Westchester Plastic Surgical Associates, P.C. - Page 15




                                       - 15 -                                         

          the trustee, after weighing the risks and benefits, was entitled            
          to have the trust make loans to Morrissey, as evidenced by                  
          promissory notes, without violating fiduciary standards.                    
               Petitioner also maintains that the notes included a                    
          reasonable rate of interest and that Morrissey, at the time the             
          loans were made, had the ability to repay.  Petitioner further              
          maintains that when his economic situation changed, he repaid the           
          loans with real estate instead of cash.  Consequently, petitioner           
          contends that since Morrissey, as of 1990, was not of retirement            
          age, it is premature to conclude that as of that date, the trust            
          would not have funds available for distribution to him upon his             
          retirement.  Petitioner asserts that the real property interests            
          transferred into the Money Purchase Plan and the Defined Benefit            
          Plan as repayment of the loans have markedly appreciated in value           
          to the point where it is reasonable to conclude that the                    
          investments were in fact prudent.  Petitioner further asserts               
          that a simple refinancing of the property could have provided for           
          both liquidity and diversity whenever Morrissey chose to do so.11           
               Respondent contends that the investments in the 23 loans               
          failed to provide the Defined Benefit Plan with a fair rate of              
          return, sufficient liquidity, adequate security, and diversity of           

               11We note that many of petitioner's contentions apply to the           
          Money Purchase Plan and not to the Defined Benefit Plan.  See               
          supra note 1.  Morrissey transferred nothing of value to the                
          Defined Benefit Plan.                                                       





Page:  Previous  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  Next

Last modified: May 25, 2011