Thomas K. and Billie J. Scallen - Page 16




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          Not all petitioner’s loans and advances to WMG were the subject             
          of promissory notes.                                                        
          Medical Investment Corporation (Medicor)                                    
               In the early 1960s, petitioner formed a company called                 
          Medical Investment Corp. (Medicor), which was in the business of            
          leasing medical equipment to doctors.  Petitioner was the chief             
          executive officer of this company.                                          
               Medicor bought the Olmstead County Bank located in                     
          Rochester, Minnesota.  The purchase of the bank was financed with           
          a loan from the First National Bank of St. Paul.  Petitioner                
          endorsed the note issued to First National Bank, which made him             
          liable as a principal.  Petitioner began as the senior vice                 
          president of the Olmstead County Bank, and he later became the              
          acting executive officer and chief loan officer.                            
               In the early 1970s, Medicor changed its corporate purpose,             
          and it acquired the Shipstead and Johnson’s Ice Follies.  It also           
          owned Northwest Sports Entertainment (Northwest) which, in turn,            
          owned the Western Hockey League franchise of the Vancouver                  
          Canucks.12                                                                  
               In December 1970, Northwest purchased a $3 million                     
          certificate of deposit from the Bank of the South Pacific and               
          Trust Co., Ltd. (South Pacific), a wholly owned Bahamian company            


               12In an annual report to the Securities and Exchange                   
          Commission, Medicor reported owning 60.1 percent of the voting              
          securities of Northwest.                                                    





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