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approximately $3 million of accrued interest. In addition,
Colorado Structures also purchased newly issued 1998 and 1999
Triview bonds.
Centre financed $1.5 million of the purchase price of the
bonds through loans obtained through two utility companies.
Centre subsequently refinanced the $1.5 million through CNB.
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
totaling $1.5 million to the utility companies. The $1.5 million
in new working capital assisted Triview in performing development
activities, but neither Centre or JCLC had the ability to control
the purpose for which the funds were used. Further, there is no
evidence in the record to support respondent’s assertion that
land owned by JCLC, and not other property within the Triview
district, was the recipient of Triview’s development activities
resulting from this infusion of cash.
With respect to the bond purchases, respondent makes much of
the fact that petitioner, his brother, and Oldach each owned
identical interests in Centre and JCLC, as well as being officers
of Colorado Structures. As such, respondent argues that the bond
purchases caused Triview to act on JCLC’s behalf or under its
direction. Respondent’s argument, however, fails to take into
account the fact that the bond purchases were all arm’s-length
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