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note was personally guaranteed by Mr. Marsh and the $1 million
note was personally guaranteed by Mr. Goldstein. Neither
increasing nor decreasing any applicable discount was the fact
that the interest rate, at 10 percent, was a reasonable 87 basis
points over the conventional mortgage rate of 9.13 percent for
the week ended January 27, 1995. Identified as tending to
increase any applicable discount were facts indicating: (1) The
note had been extended several times, such that there could be no
assurance it would be paid in full at the upcoming maturity date
without legal action, although all interest payments were
current; and (2) there could be environmental concerns relative
to a small section of the mobile home property, which could delay
the refinancing and/or sale of the property.
After setting forth the above factors, Mr. Thomson’s report
concludes:
In our opinion, based on our experience with real
property and promissory notes, we believe a range of 5
to 15 percent discount would be applicable to the
subject $450,000 note. Therefore, based on the factors
considered and the note itself, it is our opinion that
a discount of 10.0 percent is reasonable to apply to
the $450,000 note in HFCL.P., as of February 1, 1995.
Accordingly, we have estimated the fair market value of
the $450,000 note in HFCL.P. at $405,000, or ($450,000
x (1.0-.10)).
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