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admitted that, while the total amount not forwarded was unknown,
petitioner’s corporations had not forwarded and now owed
Northwest an amount in excess of $8 million.
In addition, in the Interim Agreement petitioner personally
guaranteed the debts of petitioner’s corporations arising from
the sale of Northwest tickets received in 1988 (but not before)
and agreed to pledge any unencumbered assets of petitioner’s
corporations to secure future corporate debts to Northwest.
Petitioner further agreed to make a full and complete disclosure
to Northwest of all personal and corporate financial records,
including bank and brokerage accounts.
After the Interim Agreement was signed, Belofsky continued
to challenge the validity of the Guaranty and to request its
return. Belofsky also asserted that the Guaranty did not form
any basis for the Interim Agreement.
Petitioner’s Proposal for Release of His Liabilities Under the
Guaranty and the Interim Agreement
On May 20, 1988, Belofsky wrote a letter to Northwest
seeking a return of petitioner’s Guaranty and his release from
liability under the Interim Agreement. As consideration for the
release and the return of the Guaranty, Belofsky proposed that
petitioner would liquidate the “‘Gerber’ account” and give the
proceeds to Northwest to be applied first against the amounts
petitioner’s corporations owed Northwest for ticket stock issued
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