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look at the report to compare it to what I was really
trying to accomplish here.
Albrecht’s explanation of his instructions was evasive at best
and further demonstrates the estate’s inconsistency with regard
to the partnership overall.
In addition, Hillgren and decedent had a history of
producing incorrect or incomplete financial records. Hillgren
and Gates both testified that Sea Shell’s balance sheets and
financial records had arbitrary and imperfect numbers. Hillgren
described financial statements that were produced by MSL in 1994
as follows:
They are strictly an arbitrary--they’re not based on
appraisal, they’re not based on cost, they’re not based
on anything other than an arbitrary--well, a
guesstimate, per foot value times the number of feet
for each location.
As the market collapsed in the early ‘90s, we did
not adjust these down. * * * [T]hey had been used for
external purposes.
Despite their inaccuracies, the balance sheets were used for
external purposes. They were provided to the lender during the
refinancing of the Nordica properties to show that decedent had
equity in the University property. For example, Sea Shell’s
balance sheet as of July 31, 1994, as provided to respondent
during the audit, represented that the value of the University
property was $4,287,500. The Safeco and Huettner loans were
shown on the balance sheet in the amounts of $1,260,419.03 and
$1,481,567.95, respectively. The balance sheet therefore
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