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purported revolving credit note (revolving credit note), and the
note reflects no maturity date. The note makes general reference
to an obligation of petitioner to make a loan to Blackland.
Petitioner, however, is not a signatory on this revolving credit
note.
As was the first, this second revolving credit note was
executed by the president of Blackland at the direction of
petitioner. No negotiations or arm’s-length discussions on
behalf of Blackland occurred in connection with the terms of the
March 10, 1995, $2.5 million revolving credit note. Again, no
separate written loan agreement or line of credit agreement to be
associated with this second revolving credit note is found in the
record.
Beginning in July of 1993, and in 1994 and 1995, petitioner
transferred funds to Blackland in the total cumulative amount of
$3,545,020, and Blackland transferred funds to petitioner in the
total cumulative amount of $724,480.
Blackland’s monthly balance sheets as of July 31 and
August 31, 1993, reflect the funds received from petitioner in
those 2 months as “shareholder loans”, even though petitioner
claims not to have been a shareholder of Blackland. Beginning in
September of 1993 and through 1996, the funds transferred by
petitioner to Blackland were classified on Blackland’s monthly
balance sheets as “Note Payable-Moccasin Farms”.
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Last modified: May 25, 2011