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plan. In recommending the use of a contract of purchase, Mr.
Braun advised Delaware Corporation, Ms. Havens, and Mr. Barber
that such a contract (1) would not trigger the due-on-sale clause
in favor of the first mortgage holder of any mortgage loan with
respect to any property that they wished to use to carry out Ms.
Havens’s and Mr. Barber’s plan and (2) would be reflected in
Delaware Corporation’s financial statements as a stockholder loan
that would be treated as equity for purposes of that company’s
ability to obtain bonding. Mr. Braun also advised Delaware
Corporation, Ms. Havens, and Mr. Barber that no recording costs
would have to be paid if a contract of purchase were used since
under such a contract no deed would be recorded. In addition,
based on information provided to him, Mr. Braun advised petition-
ers that the respective properties of Ms. Havens and Mr. Barber
that they intended to use in effecting Ms. Havens’s and Mr.
Barber’s plan were rental properties and that Delaware Corpora-
tion would be entitled to deduct the operating expenses relating
to any such rental property provided that the rent was paid for
such property.
Some time shortly before August 1, 1993, Delaware Corpora-
tion, Ms. Havens, and Mr. Barber caused contracts of purchase to
be prepared in order to implement Ms. Havens’s and Mr. Barber’s
plan, and Mr. Braun reviewed those contracts.
Delaware Corporation, Ms. Havens, and Mr. Barber entered
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