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Concerning environmental issues, Mr. Thomson reviewed Park
Environmental Corporation’s environmental analysis dated June 10,
1994, and requested, but was not provided, sections of a remedial
action plan dated January 26, 1995, outlining procedures for
removal and disposal of waste material. Cleanup was ultimately
assumed to require minimal cost in comparison to the overall
property value, such that it would not significantly influence
refinancing or sale.
In then determining whether the Marsh note should be valued
at a discount to its face value, Mr. Thomson weighed five
factors. These were: (1) The collateral securing the note; (2)
the existence of guaranties relating to the note and its
collateral; (3) the interest rate on the note; (4) previously
granted extensions of the note’s maturity date and the currency
of payments; and (5) environmental concerns related to the
collateral. Mr. Thomson concluded that, of the foregoing
factors, the first three enumerated would tend to support no
discount or a slight premium while the latter two would tend to
support a discount.
More specifically, Mr. Thomson opined that the following
facts would tend to decrease any applicable discount: (1) The
Marsh note possessed good collateral coverage in that it was
secured by a $1 million note, which in turn was secured by a deed
of trust on a well-located mobile home park; and (2) the $450,000
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