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collateral, Centre pledged the 1987 Triview bonds and mortgaged
two buildings it owned, and JCLC placed a mortgage on the Jackson
Creek property. JCLC did not receive any of the proceeds from
this loan. JCLC was designated as a borrower on the loan so that
the Jackson Creek property could be used as collateral.
Under a separate agreement, the utility companies agreed to
commit the $1.5 million they received from Centre’s repayment of
the loans to Triview. In exchange, Triview issued new bonds to
the utility companies in the amount of $1.5 million. In
addition, during 1998 and 1999 Colorado Structures purchased
newly issued Triview bonds.
Also on September 22, 1997, Vision and JCLC agreed to a
revolving development loan of $600,000 from CNB. Petitioner and
his brother personally, as well as Colorado Structures and
Centre, served as guarantors on the loan. The purpose of the
loan was to finance the infrastructure development of a specific
parcel of the Jackson Creek property described in the agreement
as being 184.627 acres in size. Among other terms, the loan
agreement required Vision to enter into contracts with qualified
homebuilders for the sale of the land, subject only to Vision’s
completion of development activities. The loan agreement also
included a borrowing limit of 75 percent of the value of the
sales contracts. Collateral for the loan included, inter alia,
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