Timothy J. Phelan and Deborah A. Phelan - Page 9

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         vice president, and petitioner’s brother, who served as                      
         secretary-treasurer.                                                         
             Colorado Structures is a commercial general contractor which            
         contracts to build commercial buildings such as large retail                 
         stores, office buildings, and schools.  During 1998, Colorado                
         Structures did not contract to build residential buildings.  In              
         1998, the company employed approximately 50 people and earned                
         revenues of approximately $117 million.                                      
              During 1996, Centre purchased general obligation bonds which            
         Triview had issued in 1987 and subsequently defaulted on.  In                
         exchange for $2.9 million, Centre received the bonds with a face             
         value of $4.8 million and accumulated unpaid interest of                     
         approximately $3 million.  Centre purchased the bonds from                   
         Massachusetts Financial and Kemper Financial.  Centre financed               
         the purchase through a stock brokerage margin account and a loan             
         in the amount of $1.5 million from a consortium of Mountain                  
         States Telephone and Telegraph Co. and Mountain View Electric                
         Association (utility companies).                                             
              In order to refinance the $1.5 million in loans from the                
         utility companies, Centre and JCLC borrowed the same amount from             
         Colorado National Bank (CNB) on September 22, 1997.  Under the               
         terms of the loan agreement, the borrowers were Centre and JCLC,             
         and the guarantors were petitioner and his brother in their                  
         personal capacities, as well as Colorado Structures.  As                     






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