Chester L. Price - Page 3

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          jointly and severally guaranteed this loan.  On May 29, 1987, the           
          partnership borrowed an additional $2,956,000 from the bank.3               
          The Partnership’s Bankruptcy Case                                           
               On June 30, 1988, the partnership initiated a bankruptcy               
          case by filing a voluntary chapter 11 bankruptcy petition in the            
          U.S. Bankruptcy Court for the District of Maryland (the                     
          bankruptcy court).  On November 13, 1989, the bankruptcy court              
          appointed a chapter 11 trustee (the trustee) to administer the              
          partnership’s assets and to develop an orderly liquidation and              
          sale of the assets.                                                         
          Petitioner’s Contribution Agreement                                         
               The trustee negotiated with the partnership’s general                  
          partners, including petitioner, to obtain some contribution from            
          them to pay the partnership’s debts.  The trustee filed a                   
          reorganization plan which, among other things, proposed a means             
          whereby general partners of the partnership could contribute to a           
          partnership release fund as a means of resolving the                        
          partnership’s claims and other creditors’ claims against its                
          general partners.  On November 27, 1990, the bankruptcy court               
          confirmed the plan.                                                         
               Thereafter, the trustee reached a negotiated settlement with           
          some of the general partners, including petitioner, whereby in              
          exchange for paying agreed-upon sums to the partnership’s                   
          bankruptcy estate, the contributing partners would be discharged            


               3 The Apr. 9, 1985, personal guaranty agreement also applied           
          to this loan.                                                               




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