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cost of operations, gross income, expenses, and net loss from
Villa del Mar as follows:
1986 1987 1988 1989 1990
Gross receipts $78,696 $132,635 $61,854 $39,984 $53,282
Cost of operations (16,337) (69,957) (35,934) (26,006) (30,489)
Gross income 62,359 62,678 25,920 13,978 22,793
Expenses (225,977) (233,294) (202,143) (310,661) (425,892)
Net loss (163,618) (170,616) (176,223) (296,683) (403,099)
In 1991, petitioner discharged the individual who had been
managing Villa del Mar for dissipating and conveying to third
parties certain assets used in the hotel operation. At this
time, petitioner was also involved in legal disputes with a
number of unpaid former hotel employees and with the construction
company that had worked on the hotel expansion project. As a
result, petitioner hired a Brazilian real estate consultant, Vera
Lucia Silvana De Oliveira (Ms. Oliveira), to represent him in
resolving his numerous hotel-related problems.
Until 1993, petitioner continued to seek financing from
other parties to complete the expansion, but he was unsuccessful.
In addition, petitioner expended substantial amounts of money in
connection with resolving various claims that had been made
against him and the hotel property.
On July 1, 1993, petitioner and the construction company
entered into a settlement regarding their dispute. Petitioner
would convey ownership of the five lots upon which the unfinished
"Building A" stood to the construction company. Among other
things, the construction company would then complete "Building
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