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to be treated as an S corporation for the years in issue. The
remaining outstanding shares in Indeck Energy (i.e., 12 shares)
are owned equally by Mr. Forsythe’s children: Michelle Fawcett,
Monica Breslow, Marsha Fournier, and Melissa Forsythe.
Mr. Forsythe also owned 63 percent of the outstanding shares
of Indeck Power Equipment Co. (Indeck Power), a C corporation,
during the years in issue.
On December 27, 1996, IPO II purchased a Cessna Citation VII
aircraft for $9,205,800 and two Garrett Allied Signal engines for
$200,375 (collectively, the aircraft) from the Cessna Aircraft
Co. The total purchase price of the aircraft (i.e., $9,406,175)
was funded by a loan from Nationsbanc Leasing Corp. of North
Carolina (Nationsbanc). The loan was evidenced by a secured
promissory note dated December 27, 1996, for the total purchase
price, executed by IPO II, as obligor, to the benefit of
Nationsbanc.
To secure the loan, IPO II and Nationsbanc entered into an
Aircraft Loan and Security Agreement (the loan and security
agreement) on December 27, 1996. The loan and security agreement
listed the following parties as “Guarantors” of the loan: Indeck
Energy, Indeck Power, and Mr. Forsythe. Indeck Overseas was not
listed as a guarantor of the loan.
In connection with the loan, Mr. Forsythe, Indeck Energy,
and Indeck Power each entered into a guaranty agreement with
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Last modified: May 25, 2011