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president and sole shareholder was petitioner, and it had no
employees. On May 20, 1992, the plan lent $10,527.84 to Inland
(second loan) so that petitioner could pay off his car loan,
which was about to go into default. An unsigned document drafted
on Aspects stationery and bearing the typewritten name of
petitioner stated that the second loan was due in 1 year, that
the interest rate payable on the second loan was 6.4 percent, and
that the second loan was secured by a 1989 Pontiac Bonneville SSE
bearing a stated vehicle identification number. The document
also stated that the second loan was renewable after the first
year at the then-prevailing interest rate plus 3 percent.
Shortly after the making of the second loan, petitioner
transferred to Inland the title to the referenced 1989 Pontiac
Bonneville SSE.
On March 1, 1993, the plan lent $94,294.89 to Inland (third
loan) so that Inland could pay the mortgage and real estate taxes
due on the building. An unsigned promissory note with a
signature block for petitioner, in his capacity as Inland’s
president, stated that interest was accruing on the unpaid
principal at 5 percent per annum and that repayment was to be
made through monthly installments of $10,000 beginning on April
1, 1993. The third loan was unsecured.
To date, no principal or interest has been paid on the
first, second, or third loan (collectively, the three loans).
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