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written notice, under section 4.3.4.2(d) of the IHCL Restated
Agreement, that Dondi’s 99-percent allocation of IHCL’s net losses
was terminated. Pursuant to the IHCL Restated Agreement, IHCL’s
net losses were then allocated to the partners pro rata in
accordance with the 85:15 ratio reflecting the two partners’
interests. As a consequence, 15 percent of the losses were
allocated to Dondi and 85 percent of the losses were allocated to
THEI. The special allocation of IHCL’s net income remained
unchanged, and IHCL’s Restated Agreement continued to allocate 99
percent of its net income to Dondi.
In October of 1987, the Marriott Corp. (Marriott) obtained a
5-percent general partnership interest in both Landmark and
Gateway. Marriott also received an allocation of 95 percent of
Landmark’s net losses and 99 percent of Gateway’s net losses.
These allocations reduced the amount of losses Landmark and Gateway
previously allocated to IHCL.
By the end of 1990, THEI’s capital account in IHCL was a
negative $5,920,614; principally, this was the result of the losses
generated between Dondi’s April 1987 default, and the reallocation
of losses to Marriott 6 months later. In contrast, by the end of
1990, Dondi’s capital account in IHCL grew to $14,879,392.
IHCL’s balance sheet as of the end of 1990 revealed the
following:
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Last modified: May 25, 2011