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shown supra in table 1, petitioner had an 8.93-percent interest
in J & J Charlotte3, and his then-wife had a 6.70-percent
interest. There were 28 other shareholders on June 30, 1996; the
next greatest percentage interest was 6.25 percent.
Petitioner signed the Plan’s July 8 and September 9, 1996,
checks to J & J Charlotte. (The record does not indicate who
signed the checks that effectuated the first three loans shown in
table 1.) Petitioner signed all five of J & J Charlotte’s
promissory notes to the Plan, on behalf of J & J Charlotte. Each
of these promissory notes was a 12-percent-per-year demand note;
each stated that it was secured by all the machinery and
equipment at J & J Charlotte.
On January 11, 2000, petitioner paid $150,500 to the Plan as
a repayment on the J & J Charlotte loans.
All of the principal of the Plan’s loans to J & J Charlotte
has been repaid. See supra note 2.
c. Eagle Bluff
Eagle Bluff was a golf club located in Chattanooga,
Tennessee. From 1994 until Eagle Bluff was sold in 2000,
petitioner was Eagle Bluff’s treasurer and its registered agent
in Georgia. On May 20, 1997, the Plan lent $50,000 to Eagle
3 So stipulated. However, the stipulated stock register
shows that, on Aug. 28, 1996, before the date of the last loan
shown on table 1, petitioner acquired 2,500 shares from another
shareholder. This raised petitioner’s interest to 11.16 percent.
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