- 5 -
from IBC for his guaranty. IBC sold KTAB TV 2 years later for
about $16 million.
On December 17, 1986, petitioner executed a guaranty
agreement in favor of certain banks with respect to loans of $15
million to IBC. The banks were represented by National
Westminster Bank USA (Natwest), as agent. The loans were made in
connection with IBC’s acquisitions of the Harlem Globetrotters
and the Ice Capades, Inc.5 The guaranty agreement states that
“It is in the best interests of the undersigned [i.e.,
petitioner] that the Borrower, which is directly owned in part by
the undersigned, be able to obtain the loans provided for in the
Loan Agreement”. The minutes of the special meeting of the board
of directors of IBC, held on February 13, 1987, describe the
circumstances of the guaranty by petitioner and authorize payment
of a guaranty fee:
The Board then held a lengthy and detailed
discussion of compensation for Thomas K. Scallen,
President of the Corporation. The Board noted Mr.
Scallen had personally guaranteed the Corporation’s
$15,000,000 obligation to National Westminster Bank,
USA (“Natwest”) incurred in the acquisition of The
Harlem Globetrotters and Ice Capades and recognized
that the duties and responsibilities had greatly
increased as a direct result of these acquisitions.
The importance of Mr. Scallen to the success of the
Corporation has been indicated by the request for “key
man insurance” by Natwest. The directors determined
5Petitioner coproduced and directed the Ice Capades. He
traveled with the show and was actually on the ice floor with the
performers during production. Petitioner’s son, Thomas M.
Scallen, operated the Harlem Globetrotters.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011