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On August 30, 1993, petitioner and Mr. Cotter entered into a
Mutual Settlement and Release Agreement (Settlement Agreement)
under applicable laws of the State of California. In the
Settlement Agreement, petitioner made the following
representation with respect to the equipment that was leased
under the contract between Cilena and Aeternum:
[Petitioner] represents and warrants that he does not
own the Leased Equipment and that he assigned such
Leased Equipment to * * * [Dr. West]; as such, to the
best of * * * [petitioner’s] knowledge, * * * [Dr.
West] is the true owner of the Leased Equipment.
The “leased equipment” was defined under the Settlement Agreement
to be “the equipment used by * * * [Aeternum] subject to the
lease by and between * * * [Aeternum] and * * * [Dr. West], as
assignee of Cilena Industries.”
The Settlement Agreement resolved the litigation that Mr.
Cotter had commenced, resulted in the dismissal of petitioner’s
bankruptcy proceedings, and dissolved Aeternum. Numerous assets,
to the extent they were owned by the partnership, were ordered to
be transferred to Mr. Cotter. Additionally, other equipment
which was originally leased to Aeternum by Cilena was ordered
transferred to Mr. Cotter. Mr. Cotter was required to execute
and deliver to petitioner a Form UCC-1 Financing Statement,7
pursuant to California law, securing the rental equipment for an
7The Form UCC-1 Financing Statement is used to provide
public notice of a security agreement. See Cal. Com. Code secs.
9302, 9401-9403 (West 1990).
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Last modified: May 25, 2011