- 6 -
little or no value because the underlying technology was widely
available in other forms.
IV. G�nther's Subsidiaries
G�nther was the majority owner of several subsidiaries that
manufactured or sold products in India, France, Switzerland, and
Germany (Berlin). The French and Swiss subsidiaries were
distribution outlets that sold G�nther's products. The Berlin
subsidiary was essentially a manufacturing subcontractor for
G�nther. The Indian subsidiary began as a joint venture in 1991.
It operated a manufacturing facility that was supposed to produce
G�nther’s products at a lower cost. G�nther’s subsidiaries were
valued at historical cost (book value) on G�nther’s balance
sheet. As of May 31, 1992, the subsidiaries’ book values
exceeded their fair market values.
V. Flint’s Guaranties of G�nther’s Bank Loans and Lease
In the 1980s, Flint also provided some working capital to
G�nther and guaranteed certain of G�nther’s bank loans. With one
exception discussed below, all of these guaranties were given
between 1983 and 1989. During this period, G�nther did not have
much equity, it had a poor relationship with German banks, and
its earnings were erratic.
At some point before January 1992, without the knowledge or
approval of Flint’s management,7 G�nther obtained a loan of
7Although Flint had imposed restrictions on the authority of
(continued...)
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