- 4 -
station and made some minor improvements. Because of the
incomplete funding, the radio station did not begin operating
profitably or generating cash-flows as projected by petitioner’s
business plan.
Lawsuit by Gnat Robot Corp. and Mr. Perot
By the end of 1990, Mr. Perot became concerned about his
investment in the venture. Gnat Robot Corp. subsequently
requested Modern World to find someone else to provide a letter
of credit. In early 1991, Gnat Robot Corp. and Mr. Perot
instituted a lawsuit against First City Bank, Modern World, Mr.
White, Linda Gale White (Mrs. White),4 and petitioner
(collectively, defendants) to enjoin First City Bank from drawing
upon the letter of credit and to award Gnat Robot Corp. and Mr.
Perot a 100-percent equity interest in Modern World (Gnat
lawsuit). After Gnat Robot Corp. and Mr. Perot failed to obtain
an injunction, First City Bank drew upon the letter of credit.
Gnat Robot Corp. and Mr. Perot continued pursuing the Gnat
lawsuit to recover the $2.5 million and to obtain the 100-percent
equity interest in Modern World. After a jury trial, the
defendants were ordered jointly and severally to pay Gnat Robot
Corp. and Mr. Perot $2.5 million plus interest. Mr. White, Mrs.
White, and petitioner were ordered to relinquish their equity
4 Mrs. White, Mr. White’s spouse, was a part owner of
Modern World and participated in the agreement with Gnat Robot
Corp. with regard to the letter of credit.
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