Thomas K. and Billie J. Scallen - Page 5




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          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.                                 





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