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During the time it was in existence, EPIC formed or
acquired a number of subsidiaries and affiliated companies
to engage in different aspects of the real estate business.
For example, as mentioned above, EMI originated mortgage
loans on behalf of EPIC limited partnerships and received
fees for doing so. EMI obtained the funds to originate
loans through "warehouse" or interim lines of credit from
CSL, an affiliated savings and loan association, and other
financial institutions. EPIC sold interests in pass-
through certificates or whole loans in the secondary market
to other financial institutions. All of the purchase money
promissory notes at issue in these cases were sold in the
secondary market in one form or another.
Another affiliate, ERSI, managed the properties that
were owned by EPIC limited partnerships, other than
properties leased back to the developers on net leases.
ERSI leased the properties, reviewed tenant applications,
collected and accounted for rental income, secured
insurance and arranged maintenance and repairs. EPIC
paid ERSI a monthly fee of $35 of the $50 it received
for managing each property.
Another affiliate, ERNI, acted as a real estate broker
to sell properties. Generally, ERNI received a real estate
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