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(1) A promissory note dated January 19, 1992, in the
principal amount of $611,750 which was executed in favor of
James, ostensibly by Brian Wilcox and Michael Donnelly; and
(2) stock certificate No. 1, dated January 19, 1992,
representing 125 shares of stock in Quotum which was issued to
Candid, Inc. (Candid), an S corporation in which James was a
shareholder.6
The note was unsecured, bore no interest, and required payment in
full “upon demand” on February 20, 1992.
James understood that the money he had transferred to Quotum
would be used to purchase Russian airplanes, that the money would
not be withdrawn from the bank account without his express
authorization, and that he would own a specified percentage of
Quotum’s stock7 and serve as Quotum’s president in consideration
for initially financing Quotum’s operations.
6 Conflicting testimony was given concerning James’ stock
ownership in Candid, Inc. James testified that he was the sole
shareholder of Candid. James’ accountant, Jeffrey J. Groen,
testified that James was the majority shareholder and that
several professors owned stock in Candid as well.
7 In a letter dated April 1, 1992, to Michael Donnelly,
James stated that he was supposed to receive a 25-percent
ownership interest in Quotum and refers to a $700,000 investment.
At trial, however, James testified that he was supposed to
receive a 51-percent ownership interest.
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