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dated June 4, 1991, recommended that he also reach a settlement
with Mr. Tooke.
As part of his business, Mr. Tooke provided financing to
buyers of his used cars. During their business relationship,
petitioner purchased used-car-buyers' notes from Mr. Tooke at a
discount. When Mr. Tooke sold a car on credit, he would accept a
promissory note for the amount of the loan and place a lien on,
and retain title to, the vehicle sold. He would then sell the
note to petitioner for an amount less than the face amount of the
note. Petitioner would receive the note, the lien, and the title
to the vehicle.
During 1989 petitioner purchased from Mr. Tooke 10
discounted auto loan notes. Before the end of 1989 all 10 of the
borrowers on the notes petitioner purchased from Mr. Tooke had
defaulted on their payments to petitioner. For all loans save
one, petitioner received title to the financed vehicle. Of the
nine for which he received title, petitioner retains the title to
all except one for which he received payment of $800 on April 27,
1992. During 1992, four of the vehicles were the subject of
notice to petitioner by mechanics lienors that they intended to
foreclose on the vehicles because of unpaid bills for towing,
storage, or repairs. Petitioner did not pay any of the claims
and permitted the liens to be foreclosed.
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