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Sack approached petitioners about the purchase of the office
condominium through at least some time after the audit of their
1993 return, petitioner did not understand the nature of or
rationale for the financial arrangements made regarding that
purchase.
Mid-Nebraska also periodically borrowed money from York for
operating expenses. In August 1992, petitioner asked York to
cover a $19,000 overdraft to USF&G Insurance Co. York refused.
Instead, Sack informed petitioner that York would take over Mid-
Nebraska’s business, but York would allow petitioner to operate
the insurance business as an employee of the bank. During the
preliminary discussion of the terms of York’s acquisition of Mid-
Nebraska’s business, Roger Sack, Sack’s son, told petitioner that
York would fire petitioner if he attempted to retain an attorney
to advise him about the transaction. Sack determined all of the
terms of the acquisition, and petitioner had no voice in the
matter.
On August 17, 1992, Sack, on behalf of York, and petitioner
signed a letter of intent. The letter of intent stated, among
other things, that “It is hereby acknowledged that Mid-Nebraska
Insurors is deficient in working capital and proposes to sell
their corporation, including all assets, to the York State Bank
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Last modified: May 25, 2011