- 17 - of Medicor. South Pacific then lent $3 million to Medicor. Medicor also received $500,000 in intercompany advances from a subsidiary of Northwest. On June 17, 1971, Capozzi Enterprises, Ltd., lent $3,648,575 to Medicor so that Medicor could redeem the certificate of deposit and repay the intercompany advances and related expenses. In an annual report submitted to the Securities and Exchange Commission, Medicor reported: The Registrant [Medicor], by Agreement dated December 17, 1971, borrowed $4,000,000 Canadian funds from the Bank of British Columbia, Vancouver, British Columbia, and concurrently therewith repaid a loan made June 17, 1971 by Capozzi Enterprises, Ltd., Vancouver, British Columbia, to the Registrant in the amount of $3,127,849 U.S. funds and $532,648 Canadian funds. The proceeds of that loan (June 17, 1971) were used to repay certain indebtedness of the Registrant’s wholly-owned subsidiary, the Bank of the South Pacific and Trust Co., Ltd., to Northwest Sports Enterprises, Ltd., * * * in the amount of approximately $3,000,000 and the repayment of additional indebtedness of the Registrant to Northwest in the amount of approximately $500,000. These debts were both guaranteed by the Registrant and its President, T. K. Scallen. * * * [Emphasis added.] The record does not show whether petitioner guaranteed the Capozzi loan or whether he received any fees for the guaranties that he made with respect to the above transactions. In 1971, petitioner lent $310,000 to Medicor. He received as collateral all the outstanding stock of South Pacific, which had a value of approximately $300,000 and a subordinated position in other investments of $77,500.Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
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